Sensex Swings 781 Points, Ends With Gain

Indian equity benchmarks rebounded despite Urjit Patel's exit from Reserve Bank of India and ruling Bharatiya Janata Party trailing to Congress in Rajasthan and Chhattisgarh.

The S&P BSE Sensex rose 0.54 percent or 190 points to 35,150 and the NSE Nifty 50 Index advanced 0.6 percent or 61 points to 10,549. In the intraday deals, Sensex swung 781 points while the Nifty touched high of 10,567 and low of 10,334.

Bharatiya Janata Party is set to lose power to Congress in Chhattisgarh and Rajasthan. While, both the parties were neck and neck in Madhya Pradesh. In Telangana, TRS headed by K Chandrsekar Rao and MNF in Mizoram are set to form the government.

"Markets have probably given a thumbs up to a formation of stable government in various states", AK Prabahakar, head of research at IDBI Capital told BloombergQuint over phone.

All 11 sector gauges compiled by National Stock Exchange ended higher led by the Nifty PSU Bank Index's 2.65 percent gain.

Mid- and small-cap shares outperformed their larger peers as the Nifty Midcap 100 Index climbed 1.7 percent and the Nifty Smallcap 100 Index advanced 1.8 percent.

While the current scenario could lead to lower market levels, we believe that the fundamentals of corporate India are likely to improve and therefore the current downtrend would pose an attractive value for the long-term investors, Nilesh Shah, MD & CEO, Envision Capital, told BloombergQuint in an interview.

Key highlights of the conversation:

• The investors are currently focusing on the political outcome over the corporate earnings. This would lead to some uncertainty and therefore the investors would hold back until there is clarity.
• We are bullish on India with a long-term view due to falling commodities and crude oil prices.

The Indian National Congress and Bharatiya Janata Party are locked in a close fight in Rajasthan, with both parties below the half-way mark. The BJP is leading in 111 seats while the Congress is trailing with a lead in 108 seats, after multiple swaps over the last hour.

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• 3M India: The Bengaluru-based container and packaging products maker fell as much as 1.15 percent to Rs 20,700. Trading volume was 40 times its 20-day average.
• Gayatri Projects: The Hyderabad-based road developer rose as much as 8 percent to Rs 176. Trading volume was 12 times its 20-day average.
• GE Power: The Noida-based power generation and energy deliver services company rose as much as 1.5 percent to Rs 825. Trading volume was 10 times its 20-day average.
• IFB Industries: The Kolkata-based home improvement products maker rose as much as 4 percent to Rs 811.25. Trading volume was more than seven times its 20-day average.

F&O data suggest significant build-up in open interest in futures of 23 non-bank lenders’ stocks. Mahindra & Mahindra Financial Services Ltd., Ujjivan Financial Services Ltd. and other peers saw an increase in long positions.

About 77 percent of the stocks in F&O universe, including Colgate Palmolive Ltd., Jubilant Foodworks Ltd. and Godrej Industries Ltd., have seen buying positions. That’s a complete turnaround compared with the extreme sentiment going into the state election verdict day with 91 percent of the scrips on negative side since start of this expiry.

About 60 percent of the stocks had seen a short build-up while 31 percent witnessed long liquidation since Nov. 30 until close of trade on Monday. Such an extreme sentiment sometimes acts as a contrarian indicator and it may not be a surprise if market stabilises at the current levels in the near term.