Benchmark equity indices Sensex and Nifty began the trade on a buoyant note on June 6, continuing to rally for the second day running, after leaders of the BJP-led National Democratic Alliance (NDA) unanimously elected Narendra Modi as their leader.
Extending its previous day’s sharp rally, the 30-share BSE Sensex jumped 696.46 points to 75,078.70 in early trade. The NSE Nifty climbed 179.15 points to 22,799.50.
Among the 30 Sensex companies, NTPC, State Bank of India, Power Grid, Tata Steel, Tech Mahindra and HCL Technologies emerged as the biggest gainers.
Hindustan Unilever, Nestle, Sun Pharma and Asian Paints were among the laggards.
Leaders of the NDA unanimously elected Narendra Modi as their leader on Wednesday.
Mr. Modi is all set to take charge as the prime minister for a historic third consecutive term with the NDA winning 293 seats in the Lok Sabha polls.
In Asian markets, Tokyo and Hong Kong traded with gains while Shanghai quoted lower.
U.S. markets ended in positive territory on Wednesday.
“As the market comes back to normalcy after the abnormal volatility of the last three days, the global construct has turned favourable with rising possibility of rate cuts by the Fed. Clear signs of weakening labour market in the US has led to a sharp decline in the US bond yield to 4.29 per cent,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Even though this is favourable for foreign capital inflows, the FIIs continue to sell on high valuations in India, particularly in comparison to the cheap valuations of Chinese stocks, he added.
“In the near term we have political stability but political developments will continue to weigh on markets,” Vijayakumar said.
Global oil benchmark Brent crude climbed 0.38% to $78.71 a barrel.
Foreign Institutional Investors (FIIs) offloaded equities worth ₹5,656.26 crore on Wednesday, according to exchange data.
Bouncing back from Tuesday’s debacle, the BSE Sensex jumped 2,303.19 points or 3.20% to settle at 74,382.24 on Wednesday. The Nifty climbed 735.85 points or 3.36% to 22,620.35.