Sensex rises 1 percent on continued Modi optimism

Reuters Market Eye - The BSE Sensex and Nifty are trading higher as optimism continues after a Narendra Modi-led Bharatiya Janata Party won a majority in the country's elections.

Although both indexes are well below the record highs hit on Friday, when the Nifty gained as much as 1.2 percent before pulling back, brokers continue to raise their targets for the year.

Overseas investors bought Indian shares worth of 36.34 billion rupees ($615.6 million) on Friday, marking their biggest single-day purchase since March, provisional exchange data shows.

Domestic oriented stocks gain, with Coal India surging 12.5 percent and Tata Power Company adding 6.4 percent.

However, analysts outpoint that stocks are now looking overbought as per technicals, which may lead to some consolidation in the near term.

The BSE Sensex was trading up 1.3 percent while the Nifty gained 1.1 percent as of 1:34 p.m.

(Reporting Abhishek Vishnoi)