An evening walk down D-St: Sensex, Nifty just shy of record highs; what to do now?

Sensex rallied more than 1,400 points while Nifty vaulted more than 400 points to register their best day in a decade. Indian markets witnessed a blockbuster day after exit polls suggested that the ruling party should be able to get a majority comfortably.

The rise in the market was led by short coverings as well as the formation of fresh positions which is a positive sign for the markets. The S&P BSE Sensex is now 135 points away from its record high of 39,487 while Nifty is just 28 points short.

Investors’ wealth rose by more than Rs 5 lakh crore in just one session. The average market capitalisation of the BSE listed companies rose to Rs 151.93 lakh crore on May 20 compared to Rs 146.58 lakh crore recorded on May 17, Friday.

The final tally – the S&P BSE Sensex rallied 1,421 points to close at 39,352 while Nifty ended 421 points up at 11,828.

“Indian markets expectedly cheered the outcome of the exit polls and Nifty registered its largest point gain since Jan 25, 2009. Nifty is just shy of its all-time high of 11,856. Nevertheless, it ended at its all-time closing high. Markets seem to have almost fully discounted the outcome of final election results,” Dhiraj Relli, MD & CEO, HDFC Securities told Moneycontrol.

“Institutional buying was seen on May 20 (reflected in large cash market volumes of over Rs 44,000 cr) which triggered some amount of short covering. Over the next three days, markets could look up to corporate results or global developments,” he said.

Nifty Bank hit a record high of 30,827 before closing the day at 30,759, up 1,309 points. Strong gains were seen in stocks like Bank of Baroda (up 9.4 percent), IndusInd Bank (up 8.8 percent), SBI (up 7.9 percent) and Yes Bank (7 percent).

More than 50 stock hit a 52-week high on the BSE that include Bajaj Finserv, Shree Cements, Bajaj Finance, HDFC Bank, HDFC, Kotak Bank, Titan Company, Axis Bank, ICICI Bank, SBI and DCB Bank, among others.

Apart from banks, the S&P BSE Capital Goods index rose over 5 percent, followed by BSE Realty index that gained 5.4 percent and the S&P BSE Public Sector that rose 5.3 percent.

The Nifty Midcap index posted its best ever gain in history to close at 17,561, up 686 points, led by gains in Reliance Power (up 17 percent), followed by Indiabulls Ventures (up 16 percent), Adani Power (up 15 percent), Reliance Infra (up 12 percent), and Graphite India (up 11 percent).