Market extends rally

Stocks extended rally in morning trade after an initial surge. At 10:21 IST, the barometer index, the S&P BSE Sensex, was up 916.17 points or 2.42% at 38,846.94. The Nifty 50 index was up 273.15 points or 2.39% at 11,680.30.

Local stocks opened on a strong note after most exit polls forecast a majority for the ruling BJP-led NDA in Lok Sabha polls. The Sensex regained the psychological 38,000 mark in opening trade.

Most exit polls forecast a majority for the ruling BJP-led NDA in Lok Sabha polls with varying numbers. The poll of polls puts NDA safely above the majority mark at 312, while UPA is likely to score 110 seats and others will have to do with 98. The poll of polls is an average of various exit polls. An election exit poll is a poll among voters conducted immediately after they leave their polling stations. It is conducted by a number of organisations and is considered an indicator to which party might form the next government.

Elections to 542 seats of the 543-member Lok Sabha ended Sunday, 19 May 2019. The Election Commission has deferred election for Vellore in Tamil Nadu over allegations of misuse of money power. The counting of votes is slated for May 23.

The S&P BSE Mid-Cap index was up 3.13%. The S&P BSE Small-Cap index was up 2.79%.

The market breadth, indicating the overall health of the market, was strong. On the BSE, 1613 shares rose and 347 shares fell. A total of 91 shares were unchanged.

State Bank of India (up 6.88%), ICICI Bank (up 5.71%), M&M (up 5.39%), Tata Steel (up 4.99%) and L&T (up 4.95%) edged higher from the Sensex pack.

Bajaj Auto (down 1.42%), Infosys (down 0.97%) and TCS (down 0.01%) edged lower from the Sensex pack.

Alkem Laboratories shed 0.03%. Alkem Laboratories said that US FDA had conducted an inspection at the company's manufacturing facility located at Baddi from 13 May 2019 to 17 May 2019. At the end of the inspection, the company has received a Form 483 with four observations. The company shall put together a detailed response with adequate corrective and preventive measures to address the US FDA observations and the same is proposed to be filed within the timeline stipulated by US FDA. The announcement was made after market hours on Friday, 17 May 2019.

Overseas, Asian stocks were trading mixed on Monday as investors awaited the next chapter in the Sino-American trade dispute. Japan's economy grew at an annualized 2.1% in the first quarter, gross domestic product (GDP) data showed on Monday.

U.S. stocks bounced back from deep losses Friday but still closed lower as trade-related jitters overshadowed strong economic data. Meanwhile, the U.S. and Canada on Friday said they reached a deal to end tariffs imposed by Washington on aluminum and steel products from Canada, while Canada will remove all retaliatory tariffs.

In US economic data, consumer sentiment rose to a 15-year high of 102.4 in May, above April's reading of 97.2, according to the University of Michigan's consumer sentiment index. The Conference Board's estimate of leading economic indicators rose for the third straight month in April to 112.1, up 0.2% from March, the group said Friday. The survey of economic conditions is a collection of forward-looking data that attempts to predict future economic growth.

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