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Market consolidated after witnessing a sharp gap-up opening. Markets shaved off some its earlier gains as investors took profits at higher levels. The rally currently is being sustained by an buying in banks, capital goods and oil&gas heavyweights.
At 11.33am, the 30-share BSE Sensex was up around 323 points or 1.5% at 21,320 levels while the 50-share Nifty index of the NSE was at 6,358, up 99 points. ICICI Bank, HDFC Bank, L&T, RIL and HDFC which are between 1 - 4.5% are the top winners on the Sensex.
"I think now the euphoric mood will begin for the markets, and since it has come after a long tiring struggling period of more than 5 years, the markets needs to rejoice this likely uptrend. I think placing a target is not the right strategy when the Nifty has clearly broken after a longterm consolidation zone. But I think at this point latching on to stronger stocks which are showing better potential is the strategy which needs to be adopted," said Kunal Bothra of LKP Securities.
Broader markets remain postitive too with the mid-cap and small-cap indices on the BSE up between 0.2-0.5%, both underperforming the Sensex which was up 1.5%.
All the sectoral indices were in the green with the Bankex being the top gainer, up 3.6% followed by capital goods, realty, power, oil & gas and metals.
Jindal Steel, Cipla and Tata Steel are the only losers among Sensex.
In asian markets, the Nikkei share index jumped 1.8% and was fast approaching last week's peak at 15,794. South Korean stocks added 1% and MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.2%.
The rupee and bonds rallied on Monday after the country's main opposition party, BJP, which is widely seen by investors as being more business friendly, performed well in state elections.
The partially convertible rupee was trading at 61.16 per dollar at 1030 hrs, after hitting as high as 60.84 to the dollar at the open, its strongest level since August 12. It had closed Friday at 61.41/42.
Markets opened at an all time high as widely expected following the Bharatiya Janata Party breezing through three of the four states that went to polls. The 'mini celebration' in the opening trades is on hopes of a similar victory for the BJP-led National Democratic Alliance in next year's general elections.
Larsen and Toubro (L&T) has rallied 5% to Rs 1,152, also its 52-week high in early morning deals on the Bombay Stock Exchange (BSE).
Shares of construction and engineering major have outperformed the market by gaining 25% since November 13, compared to 5.6% rise in benchmark S&P BSE Sensex.
Analyst at Prabhudas Lilladher in report dated November 20, has maintain ‘Accumulate’ rating on the stock as the management believes execution should pick-up in H2FY14 (October-March) since lot of orders were received in H2FY13 and are likely to pick-up in execution.
With expectation already running low on L&T meeting its guidance, scope for disappointment is low. Asset monetization in IDPL could be an additional trigger, added report.
Meanwhile, L&T has received fresh orders over Rs 5,000 crore since November, according to regulatory filings.
With a giant order book, L&T is well placed to weather growth-related short-term pains in the domestic economy (by timely diversification in overseas geographies) and is best placed in the capital goods space to catch the capex boom as and when it happens, says analyst at ICICI Securities in a note.
