Mumbai: After three days of consolidation, equity benchmarks set another record closing high on Wednesday with the Nifty hitting 6800-mark supported largely by banking and financial stocks. The index went up as high as 6,808.70 intraday, before closing at 6796.20, up 101.15 points or 1.51 percent.
The Sensex surged 358.89 points or 1.61 percent to 22702.34 after hitting highest point of the day at 22740.04. Unless and until the market does not see the outcome of Lok Sabha elections on May 16, the current euphoria is likely to continue, say experts.
Prabhat Awasthi, Nomura says the brokerage house believes that an NDA win would lead to a further positive knee-jerk reaction. "We see 5-10 percent upside to our December 2014 Sensex target of 24,700 in the case of a strong election outcome," Awashti adds. Meanwhile, Harendra Kumar of Elara Capital feels the Nifty is likely to get closer to 6900-7000 levels , which could be the euphoric peak or an intermediate top.
Banks took the charge of this solid run with the BSE Bankex rising 3.5 percent. India's largest lenders State Bank of India and ICICI Bank rallied around 3.5 percent while rival Axis Bank was up 4.5 percent and HDFC Bank gained 2.6 percent.
Housing finance company HDFC climbed over 3 percent. Among other sectoral indices, Metal, Healthcare, Realty, Capital Goods, Auto, Power and Oil & Gas gained 1-2 percent. Sun Pharma continued to top the buying list among Sensex 30, rallying 6.6 percent in addition to 2.7 percent upmove in previous trading session.
UBS has upgraded the stock to buy with a target price of Rs 720 after the company decided to buy Ranbaxy, which has been rapped by the USFDA over quality issues, for $ 4 billion. Commercial vehicle maker Tata Motors jumped nearly 5 percent while engineering and construction major L&T was up 1.6 percent and petrochemical major Reliance Industries soared 2 percent.
Among metals, Tata Steel, Hindalco Industries and Sesa Sterlite gained 2-4 percent. However, technology shares saw selling pressure ahead of January-March quarter earnings that will be kicked off with Infosys numbers on April 15. The BSE IT Index fell 1 percent; Infosys and TCS lost over 1 percent while Wipro was down 0.55 percent.
The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices gaining 1.7 percent and 2 percent, respectively. Advancing shares beat declining ones by a ratio of 1674 to 715 shares on the BSE. On the elections front, the second phase of Lok Sabha polls held today in Arunachal Pradesh, Meghalaya, Manipur and Nagaland for six seats. The third round will begin on April 10 for 92 seats spread across 11 states including Delhi and three union territories.
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