Notwithstanding weakness in the global markets and rising crude oil prices, the domestic stock market extended gains for a second session on Friday with
Sensex and Nifty rising over a per cent ahead of the exit polls results on Sunday.
The last phase of the seven-stage Lok Sabha elections will wrap up this weekend with exit polls starting to come out on Sunday evening.
Heavy buying was seen in private bank, financial, auto and realty stocks. While there was mild selling in IT, pharma and PSU bank stocks.
From the Sensex pack, Bajaj Finance, Hero MotoCorp, HUL stood as the top gainers. Vedanta, Sun Pharma and
Infosys were the top losers.
The volatility index or India VIX surged over 2 per cent to top the 29 level.
Here are top factors that boosted Dalal Street on Friday:
Election-related trades
Traders might have taken election-related bets ahead of the seventh-phase polling. Indian voters are eagerly awaiting exit polls.
According to Milan Vaishnav, Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, traders are expected to adjust their positions on Friday prior to general election results.
Analysts though warned investors to take exit polls results with a pinch of salt.
“Exit polls have not been accurate for the last three national elections. In 2004, exit polls wrongly forecasted BJP-led NDA coalition winning again, while in 2009, they meaningfully underestimated Congress-led UPA's seat share. In 2014, while exit polls correctly predicted a BJP-led NDA victory, they significantly underestimated the margin of victory,” UBS said.
Private lenders, FMCG stocks lift indices
A major part of Friday’s rally was led by banking and financials and FMCG stocks. Data suggests the HDFC twins alone contributed 140 points to Sensex’s rise.
ICICI Bank,
Kotak Mahindra Bank and Bajaj Finance contributed another 120 points. FMCG stocks ITC and
Hindustan Unilever also contributed 85 points to the index gains. Overall, 21 of out of 30 Sensex stocks were ruling higher.
Technical factor
During the session, NSE Nifty broke out from an inverted Head & Shoulders pattern, whose neckline was placed at the 11,260 level. A sustained trade beyond this resistance line was expected to take index towards of 11,300-11,370 range.
The index on Thursday made Harami pattern on the daily chart. Some experts were of the view that breaching the 11,300 level would trigger a rally.
“Nifty formed a Harami pattern and a narrow-range three bar formation on the daily scale, indicating that a small follow up could lead to a short-term bottom process ahead of the election outcome,” Chandan Taparia of Motilal Oswal Securities said on Thursday.