Leader Online Desk: After the Lok Sabha polls, all exit polls have indicated the formation of a BJP-led NDA government at the Center once again. The positive results of this were seen in the domestic stock market today (June 3). Nifty opened above 23,300 for the first time. Nifty showed a gain of around 1600 points in Bank. While the Sensex was also seen trading above 76,000 for the first time. Due to this bullish wind, the wealth of investors in the stock market has increased by Rs 12 lakh crore in the first 2 hours. At the close of trade today, the Sensex gained 2,507.47 points (3.39%) to 76,468.78 while the Nifty gained 776.55 points (3.45%) to close at an all-time high of 23,307.25.
What happened in the opening session today?
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- The Nifty opened 807 points higher at 23,337, while the Sensex opened 2,622 points higher at 76,583.
- Nifty Bank was seen trading up 1906 points at 50,889.
- The rupee strengthened by 47 paise to open at 82.99/$ against 83.46.
According to exit polls released on Saturday, it is predicted that the Modi government will return for the third time. The Lok Sabha election results will be announced on Tuesday, June 4. Markets recovered on Friday and the Nifty rose 42 points to close at 22,530. The Sensex closed up 75 points at 73,961 and the Bank Nifty gained 301 points at 48,983. Today the transaction started positively. Nifty opened above 23,300 for the first time. The Sensex was also seen trading above 76,000 for the first time with Nifty Bank showing a gain of around 1600 points.
Strong movement of shares across all sectors
Most exit polls point to the BJP-led NDA returning to the Centre. Due to this, there is a big boom in the stock market and there is a huge purchase of PSU shares. Infrastructure sector shares also gained well. Bullish winds blew in the stock market. Shopping was seen in almost every sector. At around 10:20 am, the Sensex was up 2,118.84 points at 76,080.15, while the Nifty50 was up 665.60 points at 23,196.30. The prospect of continued investment in infrastructure and manufacturing led by Prime Minister Narendra Modi boosted investor confidence. Nifty Energy, Nifty PSU Bank and Nifty Realty rose between 4-5% each. The market capitalization of all listed companies on 'BSE' increased by 11 lakh crore, making investors richer.
Sensex, Nifty jump over 3 pc to settle at lifetime high levels
— Press Trust of India (@PTI_News) June 3, 2024
Public Sector Undertakings (PSUs) PSU shares rose in the trading session amid expectations of continued robust capital expenditure by the government in key sectors such as railways, defense and power. Mid and small cap indices touched fresh highs. All areas appeared in green icons. Shares of the Adani group and state-owned companies saw the biggest gains. Shares across all sectors experienced gains.
Call for purchase
29 out of 30 stocks in the Sensex saw buying. While all 12 shares of Nifty Bank saw buying. 47 out of 50 Nifty stocks saw buying. Power Grid Corporation, Adani Ports, Adani Enterprises, Shriram Finance and NTPC were the big gainers in the Nifty. So. Almost all the sectoral indices of Nifty witnessed gains. All field indices appeared in green. BSE Bank Index has seen a gain of 3% today. Bank of Baroda, SBI, Axis Bank were seen trading as top gainers. By 12:30 PM Sensex was up around 2300 points, Nifty around 700 points. Bank Nifty rose by around 1900 points. While midcap increased by around 1600 points and smallcap by around 420 points.
12 lakh crore increase in investor wealth
Sensex and Nifty broke all their previous records and set new records. The Sensex opened with a bumper bounce of 2,700 points. Nifty crossed 22,300 level for the first time with a gain of 4 percent. Even the Bank Nifty, BSE Midcap and Smallcap indices touched their new all-time highs today. This boom made investors rich. In the first 2 hours, the wealth of investors in the stock market increased by Rs 12 lakh crore.
SBI shares surge, price hits new 52-week high
Shares of SBI (State Bank of India) opened with a gain of Rs 867.95 on BSE today. It experienced an intra-day gain of 9.78 percent to touch a high of Rs 911.30. This is the highest increase in the last 52 weeks. The market cap of the bank is over Rs 8.10 lakh crore. Shares of SBI are up 40 percent in 2024. Shares of State Bank of India rose around 10 percent. The rise hit a new 52-week high. With this, the bank's market capitalization crossed the mark of Rs 8 lakh crore. The number of listed companies in the country has increased to 7 with a market cap of Rs 8 lakh crore. Among them are Reliance Industries, Tata Consultancy Services, HDFC Bank, Bharti Airtel, Infosys, ICICI Bank.
Adani Group's share capital has crossed the Rs 20 lakh crore mark
Shares of Adan Group experienced a tremendous rally. The market cap of all the listed companies of the group together reached close to Rs 20 lakh crore. The market cap of Adani Group shares rose by around Rs 3 lakh crore in early trade. Its market cap was around Rs 24 lakh crore before the release of the Hindenburg Research report. Its market cap fell below Rs 7 lakh crore by the end of February 2023.
HPCL, BPCL shares also rose
Shares of state-owned oil companies HPCL, BPCL rose by 8%. HPCL, BPCL rose more than 8% ahead of record bonus issue date. HPCL has fixed June 21 as the record date for bonus issue of shares. The bonus date of BPCL is fixed on June 22.
Shares of construction major IRB Infrastructure rose sharply. Trading in the stock opened with gains of over 12 percent. This share has been booming for the last one year. Toll hike of up to 5% has been implemented at 1100 toll booths across the country from Monday. This was seen to affect the shares of the construction sector company.
These are the five main reasons for the stock market boom
1) Exit polls indicated strong government formation
All the exit polls of the Lok Sabha elections have predicted that the Narendra Modi-led NDA government will come to power for the third consecutive term with an absolute majority. This signal of economic stability favored the stock market and led to a huge increase in market transactions. Market experts say the BJP's victory is expected to maintain political stability and economic policies at the central level.
2 ) GDP figures positive
The central government had announced the GDP figures after the stock market closed on Friday, May 31. It was clarified on behalf of the government that the country's GDP was 7.8 percent in the quarter from January to March. In the entire financial year 2024, India's economy grew at a rate of 8.2 percent. This figure turned out to be higher than the estimates of many economists. Therefore, it is believed that the confidence of the investors on the development of the country has become stronger. Apart from this, the fiscal deficit of the government has also improved. The central government had projected the fiscal deficit at 5.8 percent of GDP in the budget, while it was 5.63 percent of GDP. This has boosted investor confidence.
3) Decrease in government bond yields
A key reason behind today's rally in the stock market is the decline in the yield on 10-year government bonds. The bond's yield fell 0.37 percent to 6.96 percent on Monday. Investors seem to have a risk-taking mindset. Now they may be turning to equity markets instead of bonds in search of higher returns, experts say.
4) Decline in Volatility Index Investors bought all round
The volatility index, India VIX, fell 18.3 percent to 20 points on Monday. Due to this decline, the possibility of volatility in the stock market has been reduced. Therefore, the enthusiasm of the investors increased more. Buoyed by this enthusiasm, investors bought in today's session, which is believed to have pushed the Smallcap, Midcap, Bank Nifty and Nifty PSU indices to new highs.
5. Positive signals from global markets
Strong cues from global markets are also having a positive impact on the Indian stock market. Interest rate cuts have recently increased in both the US and Europe. Apart from this, many Asian countries have also reported positive economic data. All these seem to have a positive impact on the domestic stock market.
