Mumbai: Equity benchmarks saw record closing highs Wednesday, on expiry day for April series derivative contracts. The Nifty climbed 25.45 points to close at 6840.80 and the Sensex advanced 118.17 points to 22876.54 after hitting intraday highs of 6,861.60 and 22912.52, respectively.
Experts remain bullish on the Indian equity market in anticipation of stable government at the Centre after Lok Sabha elections. Gautam Chhaochharia, Head of India Research of UBS believes that the market hasn't factored a very strong election outcome yet.
Result of the ongoing Lok Sabha election will be declared on May 16. Opinion polls suggest that National Democratic Alliance (NDA) is likely to get 250 plus seats, he says. For the April series, the Sensex and Nifty climbed 3 percent, in addition to a 6 percent rally in last series on strong inflow of foreign money and hopes of stable government at centre.
The market will be shut on Thursday for Lok Sabha elections in Mumbai. Sixth phase of Lok Sabha elections for 117 seats across 12 states will be held on April 24. Banks and capital goods stocks took the market higher.
Most experts ask investors to bet on these sectors as both will see strong gains after market-friendly election outcome. Chhaochharia advises investors to add cyclicals and banks on positive poll outcome. He sees gradual recovery for cyclicals in two-three year timeframe.
BSE Bank and Capital Goods indices gained 1.1 percent and 1.5 percent, respectively. Engineering and construction major L&T was up over 2 percent while top lenders State Bank of India, ICICI Bank, HDFC Bank and Axis Bank gained 0.8-1.5 percent. Cigarette major ITC was up 0.8 percent while software services exporter Infosys and housing finance company HDFC rose 0.5 percent each.
However, shares of Tata Motors, TCS, Reliance Industries, Wipro, NTPC, Hero Motocorp, HUL and Sesa Sterlite were down 0.25-1.25 percent. On the earnings front, YES Bank's Q4FY14 net profit grew 18.8 percent year-on-year to Rs 430 crore on higher non-interest income. Its net interest margin increased to 3 percent from 2.9 percent and asset quality improved on sequential basis. The stock was up 1.7 percent.
Mastek fell nearly 3 percent as its January-March quarter consolidated net profit dropped 38.2 percent sequentially to Rs 11.3 crore on lower revenue and weak operational performance. Indiabulls Housing Finance's net profit increased 21.8 percent year-on-year to Rs 451.4 crore on the back of strong other income of Rs 246.3 crore (up 162 percent Y-o-Y).
The stock lost over 3 percent. In the broader space, Mangalore Chemicals and Fertilisers surged 6.6 percent after Deepak Fertilisers and its wholly subsidiary SCM Soilfert have made open offer to company's public shareholders to acquire up to 3.08 crore equity shares, constituting 26 percent of the voting share capital.
The offer price is at Rs 61.75 per share. Deepak Fertilisers gained over 4 percent. Ballarpur Industries spiked 7 percent as the company said it would plan $250 million worth Singapore IPO for international business.
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