Trading on both the BSE and the NSE has been halted for the day as markets hit a 20% upper circuit, after re-opening for trade. At the beginning of today's trade, 9:55 am, the markets were locked at 15% upper circuit and exchanges halted the trade for two hours.
The UPA's (United Progressive Alliance) clean sweep win has cheered the markets and helped the benchmark indices to hit 20% upper circuit.
The 30-share Sensex closed 2,110.79 points or 17.34% higher at 14,284.21 and the Nifty surged 651.50 points or 17.74%, to settle at 4,323.15. The Sensex saw the 14,000 mark and the Nifty surpassed the 4,300 level for the first time since September 22, 2008. The Nifty May futures ended with 46.85 points premium.
Shankar Sharma of First Global said the win was an amazing verdict. “My long-term prediction is that the Bhartiya Janata Party (BJP) would reduce to 40 to 60 seats long ahead in the future,” he said. “This win is the ultimate game changer for the country, comparable to what happened in ‘84-‘85 and in ’91,” he said. Sharma sees a 40% rally in the next two to three months time.
Anand Tandon, Director Equities, Brics Securities, said one should take some money off the table if 14,500 on the Sensex hits “because no matter what the fact to the matter is that at some stage there are other factors other than just liquidity and euphoria which come in play.”
A lot of hedged positions were outstanding in the market today and hedges were taken via selling Nifty Calls.
Among the benchmark indices, the BSE Midcap was up 447.41 points or 11.75%, to 4,254.48 and the Smallcap Index rose 9.05% or 387.14 points, to 4,666.74.
Total volumes traded on both exchanges were at Rs 3100 crore. This comprised of Rs 2800 crore from the NSE F&O segment, Rs Rs 300 crore from NSE & BSE cash segments. Only 207 stocks traded on the NSE and 842 stocks on the BSE.
Previous incidence of markets hitting circuit
January 22, 2008: This was the latest instance that the market hit 10% lower circuit. The reason for the down circut was subprime loss, & the dismal global markets cues.
October 17, 2007: The BSE Sensex crashed by 1743 points on 17 October 2007. The crash was led due to concerns of SEBI issuing new guideline for P-Notes
May 17, 2004: The markets crashed 5 years back when the NDA government lost to the Congress in Elections.
Sectoral Indices
The BSE Realty Index was up 23.45% and Capital Goods Index went up 21.9%. Among other indices, Bank and Oil & Gas indices were up 19% each.
Power Index moved up 18.33% and Metal Index gained 16.10%. TECk, Auto and IT indices rose 11.2-14%. Healthcare and FMCG indices gained 7.2-8%.
30 stocks on the Sensex
BHEL shot up 32.72% and L&T gained 29.53%. DLF, ICICI Bank, HDFC, Reliance Communication, Bharti Airtel, Reliance Infrastructure, SBI, Jaiprakash Associates and Reliance Industries went up 20.62-25.9%.
Sterlite, HDFC Bank, Tata Steel, Tata Motors, Grasim, Wipro, Hindalco, Tata Power, ONGC, TCS, M&M, NTPC, ACC and Ranbaxy Labs gained 11-16.5%. Infosys, Maruti Suzuki, Sun Pharma, ITC and HUL surged 6.3-9.8%.
Market breadth was positive; about 1804 shares advanced while 779 shares declined. Nearly 537 shares remained unchanged.
Global cues
At the time of closing of Indian equities, European markets were trading lower. The FTSE 100 was down 0.14% or 6.22 points, to 4,341.89. The CAC 40 fell 18.62 points or 0.59%, to 3,150.43 and the DAX declined 54.27 points or 1.15%, to 4,683.23.
Asian markets were mixed. Hang Seng, Straits Times, Taiwan Weighted and Jakarta Composite gained 1.1-1.4%. Shanghai was up 0.28%. However, Nikkei fell 2.44% and Kospi was down 0.36%.
Trade halts as mkts hit upper circuit; re-open at 11:55 am
The one-sided win for the UPA government (lead by 262 seats) in the 15th Lok Sabha election, which shrugged off the exit polls results drastically, brought great cheers for the markets in early trade. The benchmark indices locked at upper circuit. The BSE and NSE have decided that the trade will start at 11:55 am (i.e. after two-hour halt).
In the first 30 seconds of trade, the Sensex crossed the 13,000 mark and inched up towards 14,000 level. This was the first time since October 2008 that the Sensex surpassed the 13,000 mark and the Nifty crossed the 4000 level. Huge upsurge of 420 points or 11.4% in the SGX Nifty was suggesting the same trend.
The 50-share NSE Nifty was up 531.65 points or 14.48% at 4,203.30 and the 30-share BSE Sensex surged 1,789.88 points or 14.70% to 13,963.30. Less than Rs 1000 crore of trade was seen in the cash and F&O segment.
Also Read See reforms, PSU divestment high on agenda: Ramesh Damani UPA sweeps Elections '09; is sub-10K a history?
Classroom: What is a circuit breaker?
It is a system to curb excessive speculation in the stock market, applied by the stock exchange authorities, when the index spurts or plunges by more than a fixed limit. Trading is then suspended for some time to let the market cool down. If the market changes more than 10%, trading is halted for one hour, more than 15% trading is suspended for 2 hours. Although introduced in November 1992, it was used for the first time in the Bombay Stock Exchange on Tuesday, 9 March 1993 when the Sensex declined by more than 5% from the opening level, i.e. from 2451.20 to 2318.26. At that time, the circuit was 5%.
Sectoral indices
The BSE Realty Index shot up 15.84% and Bankex gained 13.63%. Among other, Capital Goods, Power, Metal, Oil & Gas and TECK indices rose 10.5-12.83%. IT, FMCG, Healthcare and Auto indices went up 4-9.64%.
Among the broader indices, the BSE Midcap Index was up 7.25% and the Smallcap Index gained 5.10%.
Reliance Industries was up 20%. Sun Pharma, HDFC, ICICI Bank, L&T and DLF gained 19-20%. Tata Communication, Hero Honda, Unitech, Grasim, ABB, Reliance Petroleum, Suzlon Energy and Axis Bank surged 17-18.8%.
Reliance Capital, Ambuja Cements, Sterlite, Reliance Power, Bharti Airtel, SBI, HDFC Bank, Reliance Infrastructure, Reliance Communication, TCS, SAIL, Infosys and Power Grid Corp were up 15-16.8%.
BHEL, Siemens, ONGC, Tata Motors, Idea Cellular, Tata Steel, M&M, Ranbaxy Labs, NTPC and ACC shot up 10-14%.
Lok Sabha 2009 election results
The Lok Sabha 2009 election results have given a clear mandate: the Congress-led United Progressive Alliance (UPA) is set to return to power and without support of the Left.
The UPA raced to an early lead ahead of the Bhartiya Janata Party (BJP)-led National Democratic Alliance (NDA). Incumbent Prime Minister Dr Manmohan Singh is now set to continue in the role.
The Indian rupee was trading at 4-month high of 48.40 a US dollar.
On the global front, Asian markets were trading lower barring Taiwan. Nikkei declined 2.5%. Shanghai Composite, Hang Seng and Kospi fell 1.3% each. Straits Times was down 0.79%. However, Taiwan Weighted lost 0.7%.
The dollar fell 0.5 percent to 94.75 yen, nearing a two-month low of 94.55. The shares of export companies are under presssure as a result of strong yen.
INE Price at posting:
40.7¢ Sentiment: LT Buy Disclosure: Held
