How the Sensex, Nifty reacted after Modi won 2014 elections

Indian equity benchmark indices Sensex and Nifty had hit a record high on May 16, 2014 as investors celebrated the Lok Sabha election results which showed that Narendra Modi would become the Prime Minister with a landslide victory. The Bharatiya Janata Party (BJP) had achieved an absolute majority with 282 seats out of 543 in 2014 general polls, the biggest government mandate in three decades, which fuelled hopes among investors that the newly appointed Narendra Modi government would fast-track reforms and accelerate economic activity.

On the counting date, May 16, 2014, the BSE Sensex surpassed the psychological level of 25,000 for the first time, surging 1,470 points in intra-day, to hit a lifetime high of 25,375.63, after result showed that the BJP-led National Democratic Alliance (NDA) was all set to form the next government at the Centre. The 50-share NSE Nifty breached 7,500-mark to hit an all-time intra-day high of 7,563.50.

However, the bourses lost momentum later in the day and slipped into negative territory as investors resorted to profit booking, with Sensex touching an intra-day low of 23,873.16. The Bombay Stock Exchange (BSE) concluded the choppy trade at a new closing high of 24,121.74, up 216.14 points or 0.90 per cent.

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In a similar fashion, the National Stock Exchange (NSE) closed trade at a record high of 7,200, up 75 points or 1.12 per cent higher. The euphoria was also witnessed in forex market with the rupee climbing to 11-month high of 58.62 against the US dollar before closing at 58.93, tracking firm trading across Indian stock markets.

Among the index heavyweights, State Bank of India (SBI) emerged as top gainers with 5.93 per cent gain, followed by HDFC Bank (2.11%), ICICI Bank (5.15%) Axis Bank (5.60%), Larsen and Toubro (3.52 %), Reliance Industries (2.59%), ONGC (1.83%) and NTPC (2.01%), were among notable gainers.

Over 200 scrips, including the heavyweights like Reliance Industries, ONGC, State Bank of India, HDFC Bank, Indian Oil Corporation and ICICI Bank, hit 52-week high on strong buying support from funds. Many of the stocks surged more than 10 per cent in the intra-day. Around 198 stocks touched their 52-week high on the NSE.

On the sectoral front, all the thirteen indices ended in green, while realty and banking index gained the most, rising as much as 5.97 per cent and 4.39 per cent, respectively. The Modi mania seems to have gripped stock market again. In the last five trading sessions, Sensex has rallied 1,576 points amid hopes that Narendra Modi would return to power with absolute majority.

The market experts opined that Sensex may cross the psychological level of 40,000 if Modi-led BJP government manages to win 300 seats out of the total 543 seats in the 2019 Lok Sabha elections. As per India Today-Axis My India Exit Poll, the NDA will win around 339-365 seats, while the Congress party will be reduced to 77-108 seats.