Market welcomes Modi-led NDA win in polls

The stock market welcomed a Narendra Modi-led NDA win in the General Election with the key benchmark indices testing their all-time high in intra-day trade on Friday.

As initial results indicated a stable government at the Centre, the BSE Sensex and CNX Nifty hit 25,375.63 and 7,563.50 in early trade. However, they pared their gains later due to profit-booking. The Sensex closed the day at 24,121, registering a 216.14 points gain. The Nifty closed higher by 79.85 points, or 1.12%, to 7,203.

According to the market watchdog, Securities and Exchange Board of India, foreign institutional investors remained net buyers by pumping in Rs 1,168.40 crore in the equity market and Rs 1,411.40 crore in the debt market.  

Dipen Shah, head, private client group, Research, Kotak Securities says, "The BJP, under the leadership of Narendra Modi, has led NDA to a landslide win - Election 2014. The high vote share and majority number of seats reflect the significant amount of ground the coalition has gained against the UPA and the other regional parties. This is the first time in the past 30 years that, a single party has won the majority in Indian elections. The formation of a stable government at the centre bodes well for the economy as well as stock markets."

On the Sensex, Sesa Sterlite remained the top performer with 11.11% gain. The stock jumped Rs 21.50 to Rs 214.95. Banking stocks, State Bank of India, Axis Bank and ICICI Bank gained 5.93%, 5.60% and 5.15% to Rs 2414.30, Rs 1756.85 and 1,464.80, respectively.

In the realty index, which registered the highest sectoral gains, Indiabulls Real Estate and Sobha Developers gained 18.84% to Rs 78.20 and 11.97% to Rs 426.95. Confederation of Real Estate Developers Associations of India (CREDAI) expects the new government will support the sector.

Ganesh Vasudevan, chief executive officer, IndiaProperty.com says, "For the real estate industry, priority areas for the new government would be infrastructure improvement and affordable housing projects. At a systemic level, steps towards improvement of transparency of the industry such as bringing in a regulator, improving speed of approvals by creating a single window process and enabling access to low cost financing of infrastructure and affordable housing projects are critical enablers. One of the focus areas for BJP has always been development of road infrastructure. Their visionary project - 'The Golden Quadrilateral' would be taken to the next level and improved road connectivity with tier 2 and tier 3 cities would help the realty industry prosper in these cities."