Bullish Narendra Modi sets bull on rampage

The Modi mania triggered a massive bull run on Friday with investors becoming richer by over Rs 1 lakh crore. Shares surged as the benchmark Sensex galloped to a new closing high enthused by the clear win of Narendra Modi-led Bharatiya Janata Party (BJP) in the Lok Sabha elections.

The Bombay Stock Exchange (BSE) vaulted to a lifetime high of 25,375.63 during intraday trading but massive profit- taking pulled the 30- share index down to a record high close of 24,121.74, up 216.14 points from Thursday's close.

The 50-scrip Nifty of the National Stock Exchange crossed the 7,500-mark for the first time in history to touch 7,563.50, up 440.35 points, or 6.18 per cent.

However, like the Sensex, it came down to settle at 7,203.00, a rise of 79.85 points, or 1.12 per cent.

The wider- than- expected BJP win spurred several investment banks, including UBS and Deutsche Bank, to raise their targets for domestic shares as they noted indexes are still relatively inexpensive and thus have more room to gain. Deutsche Bank raised its December 2014 target for the Sensex to 28,000 points saying shares are about to enter "a structural bull market". Deutsche Bank said that investors should focus on domestic cyclical shares as well as sectors that could benefit from BJP's efforts to revive the economy, including banks, oil and gas, industrials and infrastructure.

The Deutsche target would imply a 10.3- per cent upside from the record high of 25,375.63 points hit on Friday.

Nearly 300 stocks hit their oneyear peak on the BSE. "Markets have surely cheered the Modi-led BJP's win today. Major concerns in coming future is the economic recovery of the country, necessary actions to be taken related to reform measures and highlights in the coming Union Budget," said Rakesh Goyal, senior vice- president, Bonanza Portfolio.

With more foreign investors pouring money into stock markets, the rupee also strengthened to an 11- month closing high of 58.79 gaining 50 paise over the previous day.

Courtesy: Mail Today