Sensex, Nifty End at Record High on Modis Landslide Win


modi-v-625_625x300_51400250820

The BSE Sensex and the broader Nifty surged to record highs while the rupee strengthened to an 11-month peak against the dollar on Friday as the Bharatiya Janata Party (BJP) led by Narendra Modi swept to a resounding majority in the world’s largest election.

Domestic-focused shares such as ICICI Bank and Ambuja Cements soared, reflecting hopes the BJP and its National Democratic Alliance are best placed to revive an economy growing at its slowest in a decade, while exporters like Infosys suffered from a stronger rupee.

The wider-than-expected BJP win spurred several investment banks, including UBS and Deutsche Bank, to raise their targets for domestic shares, as they noted indexes are still relatively inexpensive and thus have more room to gain.

Still, most market gains were later capped and analysts cautioned the rally will now need to be justified, as key tests loom for the government, including the selection of a cabinet.

Other critical areas for investors include the new government’s relationship with a central bank focused on inflation and the need to deliver a budget that can reassure markets and credit agencies about the fiscal deficit….

Click here to read more