Sensex Just 500 Points Away From All-Time High As BJP Leads In Karnataka

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Mumbai: Reversing early losses, the Sensex and Nifty moved higher as BJP pulled ahead in Karnataka elections. Markets had opened flat as early leads indicated Congress and BJP locked in close fight in Karnataka, where votes were cast on Saturday. The Sensex was up over 400 points at 35,991, less than 500 points away from all-time high of 36,443, hit in January this year. Nifty was firmly above 10,900.The rupee also recovered to 67.55 after falling to 67.77 against the US dollar, its lowest since January 2017. The rupee had ended at 67.51 against the US currency on Monday.

Here are 10 updates from stock markets

The gains were broad-based today with all sectoral indices trading in the green. Banking, capital goods and metal stocks led the gains.

Tata Steel, Bajaj Finance, Power Grid Corp, Titan and HDFC Bankwere among the top gainers in Nifty 50 index, up between 1.5 per cent and 3 per cent.

Shares of diversified consumer goods maker Hindustan Unilever rose over 1 per cent after the company reported an about 14 per cent increase in profit on Monday, helped by higher sales in its home care business.

Some analysts say that the Karnataka election results will only have a short-term impact on stock markets. In the longer term, they say, the markets will move in tune with fundamentals.

VK Sharma, head private client group & capital market strategy at HDFC Securities, says, “We believe the outcome of the Karnataka elections will only have a limited impact on our markets. The long term mover of the markets is the growth in our economy and the ever improving demographics.”

“The market has pinned its hopes on earnings recovery and largely ignored the deterioration in the macro, which may weigh on heady multiples,” Kotak Institutional Equities said in a note.

Kotak also said that market’s focus will increasingly shift to macro and earnings. “We note that India will have to likely contend with a weaker macro in CY2018/FY2019 versus CY2017/FY2018 given likely higher inflation/interest rates and possibly higher CAD/weaker currency.”

Inflation data released on Mondayshowed that retail inflation accelerated in April to 4.58 per cent, after easing for three straight months, mainly driven by faster hikes in fuel prices.

Devendra Kumar Pant, chief economist at India Ratings, said: “It is difficult to state whether or not the Reserve Bank of India will change rates based on these numbers. As long as inflation is hovering between 3.5 per cent and 4.5 per cent, I do not expect the RBI to intervene.”

Asian markets were mixed today after a choppy session on Wall Street. MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.16 per cent. Overnight, the Wall Street ended higher in a choppy session. The Dow Jones Industrial Average rose 68.24 points, or 0.27 per cent while the Nasdaq Composite added 8.43 points, or 0.11 per cent, to 7,411.32.

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