Sensex rallies over 400 pts after Modi's resounding victory

The benchmark BSE Sensex rallied over 400 points in early trade Friday a day after Prime Minister Narendra Modi-led BJP got an absolute majority in the Lok Sabha elections.

Amid market euphoria, the rupee also appreciated 23 paise to 69.78 against the US dollar.

After hitting a high of 39,223.85, the 30-share index was trading 170.51 points, or 0.44 per cent, higher at 38,981.90. Similarly, the broader NSE Nifty spurted 54.15 points, or 0.46 per cent, to 11,711.20.

Top Sensex gainers in morning trade include L&T, Bharti Airtel, SBI, Tata Motors, Bajaj Finance, Asian Paints, M&M, ICICI Bank, Axis Bank, IndusInd Bank, Infosys and HDFC twins, rising up to 2 per cent.

While, Bajaj Auto, ONGC, HUL, Coal India, HCL Tech, TCS, NTPC and RIL fell up to 2 per cent.

In the previous session, the BSE Sensex surged over 1,000 points to touch the 40,000-mark for the first time ever following the BJP's stellar electoral show, but could not sustain the momentum as investors chose to cash in on the gains.

The Sensex ended 298.82 points, or 0.76 per cent, lower to close at 38,811.39, while the Nifty settled 80.85 points, or 0.69 per cent, down at 11,657.05.

Prime Minister Modi on Thursday led Bharatiya Janata Party (BJP) to a thumping victory for a second term in office, winning an absolute majority and on course to touch the 300-seat mark in the 543-member Lok Sabha.

According to Krishna Kumar Karwa, Managing Director-Emkay Global Financial Services, it was extremely crucial from the country's perspective, that there be a continuity of government, for the unfinished policy agenda of the NDA government to be taken to its logical conclusion.

"Global investors and even corporate India will be enthused with a stable and strong government at the centre and we should expect robust foreign portfolio investment and foreign direct investment in the coming months," he added.

Meanwhile, foreign institutional investors bought equity worth Rs 1,352.20 crore on Thursday, while domestic institutional investors sold shares to the tune of Rs 593.54 crore, provisional data available with stock exchanges showed.

Elsewhere in Asia, bourses in China, Japan and Korea were trading on a negative note in their respective early sessions.

Brent crude, the global benchmark, was trading 1.21 per cent higher at 68.57 per barrel.