Sensex reverses from new peak to close 383 points down

MUMBAI: After the exit polls’ predictions of a continuation of the BJP-led government at the Centre led to a euphoric market rally on Monday and which continued till early trades on Tuesday, nervousness engulfed Dalal Street traders. Within minutes of the start of Tuesday’s trade, the sensex scaled a new all-time peak at 39,572.

But the index failed to hold on to the record levels due to profit-booking by traders and speculators, and finally settled at 38,970 — down 383 points, or 1%. HDFC Bank, Infosys and ICICI Bank together accounted for most of the index’s losses, while Reliance Industries, Bajaj Finance and HUL partially cushioned the fall.



According to Religare Broking president (retail distribution) Jayant Manglik, the key focus for market participants throughout this week would be the election outcome on May 23. “The markets are pricing in a clear victory for the NDA government. Any disappointment on the result day could lead to a correction,” Manglik said.

“Going forward in the medium term, notwithstanding the near-term rally, we expect the markets to consolidate after the election outcome (even if favourable) as the focus would shift back to fundamentals (like corporate earnings) and global cues, which have been volatile due to re-escalation of trade tensions between the US and China. Further, the movement in crude oil prices, which have been gaining momentum after the US ended Iran sanction waivers, and the currency will also provide direction to the markets,” he said.

The day’s session left investors poorer by Rs 1.5 lakh crore with the BSE’s market capitalisation now at Rs 149.9 lakh crore. In the interbank foreign exchange market, the rupee too traded in a narrow range and closed 2 paise stronger at 69.72 to the dollar. On Monday, the Indian currency had rallied 48 paise, also because of the exit poll-related feel-good rally.