The Sensex crossed 25300 mark while Nifty was up 1.12%.
Indian markets welcomed Modi’s thumping win with the Sensex touching its all-time high of 25375. The Sensex opened 365 points up and was up as much as 6%. The index shed some gains later and closed at 24,121. The 50-share Nifty touched a high of 7552 and closed at 7,203, up 1.12%.
Fund managers said that the formation of BJP government would be positive for markets. They believe that that banking, infrastructure and mid-caps are likely to outperform large caps.
Harsha Upadhyaya, Chief Investment Officer - Equity, Kotak Mutual Fund
The decisive verdict of Indian electorate is definitely positive for our economy as well as markets. Over the next few weeks, the focus will be on news flow from new government with respect to their policy initiatives. Despite equity market at new high, we believe there is upside in equities given reasonable valuations and expected improvement in fundamentals.
Sankaran Naren, Chief Investment Officer, ICICI Prudential AMC
The election results 2014 are far ahead of all the exit poll expectations. Post 1984, this is the first time a single party is getting almost absolute majority. This is extremely positive structural move for the potential returns in the equity markets. It is also positive for a potential drop in interest rates over the next 18 months. Hence, it is extremely important for investors to consider investing in equities. Currently, domestic investors are extremely under-invested in equities and we believe they should allocate to equities even today. We believe that banking, infrastructure and mid-caps are likely to outperform the large caps, which does not mean that large caps will not be in a position to give returns. With regards to fixed income, investors should consider moving out of all defensive fixed income products to much more aggressive ones. The decisive verdict of Indian electorate is definitely positive for our economy as well as markets. Over the next few weeks, the focus will be on news flow from new government with respect to their policy initiatives. Despite equity market at new highs, we believe there is upside in equities given reasonable valuations and expected improvement in fundamentals.
Sanjay Chawla, Chief Investment Officer, Baroda Pioneer AMC
With election verdict behind and a government with majority in place, focus will shift to ministerial allocation and policies. Priority of the new Government would be to revive the investment climate in the country. Given the present status of economic condition and the manifesto of NDA, we are expecting enhanced focus in infrastructure space. In the last five years, consumption has led the growth. In the coming years, investments are expected to lead the growth. New Government is expected to ensure that investment environment is conducive to attract capital from both domestic and from overseas investors.”
Nobutaka Kitajima, CIO-Equity, LIC Nomura Mutual Fund
For a long-term investor, with the stable government at the helm and anticipated improvement in economic growth, the fundamentals of some of the globally competitive industrial companies can only get stronger. Infrastructure investment will obviously be a focus area for the new government, and the financial sector will also be a key beneficiary from the economic recovery given the leverage in their business model. At the same time, segments of the market which were left out amid the election rally, for example, IT may also represent a good investment opportunity, given their strong earnings base and valuation.
Rajesh Iyer, Head- Investments and Family Office, Kotak Wealth Management
Clear majority would boost sentiments and would have ripple down effect on the economy over the short term. Post initial euphoria it is the policy measures which would have real impact on the economy. For the bond market the budget would become crucial as the fiscal deficit number would actually indicate if there would be any additional govt. borrowing in the current fiscal compared to the one indicated in vote-on-account budget.
Clear mandate would provide room for significant reforms and a broad based rerating in the markets. Continue to be bullish with scope for mid-caps and small caps to provide significant outperformance as investors start looking beyond large caps for alpha.
