The BSE benchmark Sensex surged as much as 1,720 points, hitting high of 76,795.31, while the Nifty 50 index touched high of 23,320, just 18 points short of its all-time peak.
The surge came as the National Democratic Alliance members elected Prime Minister Narendra Modi as the leader of Lok Sabha, marking a major step towards the formation of the Modi government for the third consecutive term.
The Sensex ended 1,619 points higher to close at record high of 76,693 and Nifty 50 index surged 469 points to settle at an all-time high of 23,290.
Following a period of uncertainty post-election, the market regained its footing, fuelled by expectations of a stable government, robust domestic inflows, and an upward revision in economic growth forecasts by the Reserve Bank of India (RBI).
The recent three-session rally showcased a strong resurgence in domestic investor confidence, offsetting foreign sales.
Clarity surrounding PM Modi’s government formation over the weekend further bolstered market sentiment.
Meanwhile, in line with market expectations, the RBI announced an unchanged key borrowing rate and revised its full-fiscal GDP growth projection to 7.2 % from 7 %. Governor Shaktikanta Das stressed on its commitment to managing inflation and bringing it towards its medium-term target of 4%.
The Monetary Policy Committee (MPC) opted to maintain the repo rate at 6.50 % for the eighth consecutive policy meeting. While four out of six MPC members supported this decision, external members JR Varma and Ashima Goyal advocated for a 25 basis point rate cut.
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