Sensex Soars 300 Points, Rupee at 11-Month High

The BSE Sensex surged over 300 points, while the broader Nifty advanced over 1 per cent on Monday. The Indian rupee rose over 0.5 per cent to an 11-month high of 58.48 per dollar.

The Sensex and Nifty have rallied sharply betting on a Modi win and now that the BJP has won a majority on its own, there are hopes of quick reforms and a turnaround in India's economy. Unlike his predecessors, Mr Modi will not have to deal with unruly partners as he implements reform. That could usher in profound economic changes, analysts say.

"He can afford to have a smaller but stronger cabinet, that means a far more decisive government. He has been saying less government and more governance, we are really likely to see that," said Navneet Munot, chief investment officer at SBI Funds Management in Mumbai.

Overseas investors, who have been the backbone of the current market rally, continued to pump dollars into stocks. On Friday, they purchased equities worth Rs 3,635 crore (net) in the cash market, their biggest one-day investment this year.

Foreign investors have poured more than $16 billion into Indian stocks and bonds in the past six months since Mr Modi was announced as the BJP's prime ministerial candidate.

Banking stocks extended their bull run, with the Bank Nifty rising over 2 per cent in morning trade today. Metals, power, realty, capital goods and PSU indices also saw over 2 per cent gains.

Coal India shares traded with over 5 per cent gains and topped the 50-share Nifty index. Sesa Sterlite, Tata Power, SBI, NTPC and L&T traded 3-4 per cent higher.

However, IT stocks fell, with Infosys and TCS down nearly 3 per cent. IT stocks have been under pressure tracking the recent strength in the rupee and amid a churn in favour of high beta cyclicals in investor portfolios.

As of 09.23 a.m., the Sensex traded 192 points or 0.8 per cent higher at 24,314, while the Nifty was up 52 points at 7,255.