The benchmark equity indices gained ground on Friday after exit polls predicted a win for the ruling BJP in the keenly-followed Gujarat elections.
Incidentally, the Indian markets largely ignored the UD Fed’s decision to increase interest rates by 25 basis points while also increasing the growth estimate to 2.5% from the earlier projected 2.1%. A rise in the interest rates in the US typically affects foreign flows in emerging markets, including India.
On Friday, the 30-share Sensex gained 216.27 points to close at 33,462.97. It gained 375 points to touch a high of 33,621.96 during intra-day trades after exit polls predicted a win for BJP in both, Gujarat and Himachal Pradesh.
The broader Nifty of the National Stock Exchange (NSE) closed at 10,333.25, up 81.15 points or 0.79%. The election results would be declared on Monday with market participants expecting a volatile session as the results pour in.
In its latest note, Credit Suisse has said that as the 2019 general elections draw closer, state elections are likely to attract greater attention from investors.
“Nearly a fourth of India’s population will experience state polls in the coming 12 months. It is also possible that the general elections could be brought forward to late 2018. This has limited direct economic implications, but the changes in market sentiment may drive volatility,” it said.
The investor sentiment was upbeat as more than 1,600 stocks gained ground on Friday on BSE, as against 1,038 declines. The Sensex gainers pack was led by M&M, Coal India and Dr. Reddy’s Laboratories with gains in the range of-of 2-4% each.
Shares of multi-specialty hospital Shelby Ltd, which made its debut on Friday, fell below the issue price of Rs.248. On BSE, the shares closed at Rs.239.25 – 3.53% lower than its issue price. The public issue of the company, which closed on December 7, was subscribed 2.8 times.
Meanwhile, the rupee strengthened to 64.15 against the dollar from 64.34 on Thursday, while the benchmark 10-year bond yield eased to 7.12%.