Benchmark indices rallied about 2 per cent in trade on Tuesday as BJP’s strong show in the state elections has a rubbed off on the Dalal Street, with investors cheering over the ruling party’s strengthening position in the upper house, which may pave way for speeding up of reform process.
In early trade, the BSE benchmark Sensex climbed 615 points, or 2.12 per cent, to hit a high of 29561.93. Nifty50 scaled a record high of 9,122.75 in morning trade and was trading up 188 points, or 2.10 per cent.
“For market, this victory increases chances of PM Modi coming back to power with full majority in 2019 general elections. Further, it will embolden him to continue with his reform process and also increase BJP’s Rajya Sabha tally in the coming years,” said EdelweissBSE 4.25 % Securities.
Tirthankar Patnaik, India Strategist at Mizuho Bank said that the election outcome should act as a big shot in the arm for the government.
“The 30-odd seats that the BJP would get in the Rajya Sabha would certainly enthuse a lot of us foreign investors, foreign banks where people look at the minority in the Upper House as a road block for the government,” Patnaik said.
The BSE Midcap and the BSE Smallcap indices were trading higher by 1 per cent each.
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