Indian shares see-sawed on Thursday with benchmark indices falling nearly 1% from record highs to close in the red, after Indian voters re-elected the Prime Minister Narendra Modi-led National Democratic Alliance with a decisive majority.
BSE’s benchmark Sensex closed at 38,811.39, down 298.82 points or 0.76% from the previous close. The 30-share gauge gave up all its gains after touching an all-time high of 40,124.96 in late-morning trade. It was the first time that the index had crossed the 40,000-mark.
Likewise, NSE’s Nifty surpassed the 12,000-mark for the first time in the late- morning session. However, traders subsequently booked profits and the index closed down 0.7% or 80.85 points at 11,657.05. Intraday, the Nifty touched a high of 12,041.15.
Mid- and small-cap indices, which jumped between 1.5% and 2% intraday, ended marginally in the red on Thursday.
The advance-decline ratio on the BSE sharply widened in favour of the sellers, with shares of 1,347 companies ending in the red against 1,167 ending positive.
The NDA alliance was leading in 345 constituencies at last count, while the opposition Congress-led coalition was likely to secure 90 seats. Modi’s Bharatiya Janata Party alone was likely to win nearly 300 seats in the elections for 542 Lok Sabha seats -- an improvement on its performance from five years ago.
The trends were largely along the lines of exit polls released earlier in the week.
“Most of the gains were priced in post the exit polls and the rally earlier this week. Market is not in a hurry as valuations appear expensive on forward earnings basis,” said Deven Choksey, managing director at KR Choksey Securities.
Choksey said that the government needs to give a thrust to the flagging economy and Indian markets need to attract more long-term foreign money rather than traders or ‘hot’ money.
“Also, domestic investors’ interest will see a boost after the election outcome,” Choksey added.
Foreign institutional investors were net buyers in Indian markets on Thursday with overseas funds accounting for a net inflow of Rs 1,352 crore ($193.5 million) in the cash segment, provisional data from stock-exchanges showed.
Analysts and fund managers said that this week’s rally helped them cover their recent short positions and book profits from their earlier trades anticipating both sides to the election outcome.
“We covered many of our shorts (short positions). So, that way, we have bought, but to buy more we need to get more because we are otherwise reasonably invested,” said Samir Arora, founder and fund manager at Singapore-based Helios Capital Management Pte. Ltd.
“I do not expect a big pop from here. The election outcome means removal of uncertainty and doubt rather than super-positive things. I am not in the camp which says that suddenly mega changes will be done by this government because they could have done those changes six months ago or one year ago,” he added.
More than Rs 56,190 crore worth of shares were traded on the BSE and NSE – the highest combined daily turnover value since May 2018.
Sectoral indices of banks, capital goods companies, real estate, telecom, and industrials gained on Thursday, while fast-moving consumer goods, pharmaceuticals, consumer durables, oil and gas, and automobiles ended down.
Adani Ports was the top gainer of the Sensex. The stock rose 5.4%.
Media conglomerate Zee Entertainment Enterprises (Zee) Ltd, IndusInd Bank, Grasim and Cipla were among the top five gainers, each of them rising between 1.7% and 5.3%.
