190312 bse
The BSE in Mumbai. The Bombay Stock Exchange rose as much as 40,124.96 or 1,014 points, before closing 0.76 per cent lower at 38,811.39. Image Credit: PTI

DUBAI: India’s benchmark Sensex index breached the keenly-watched level of 40,000 mark, marking a new record, but eased later as incumbent prime minister Narendra Modi stunned the opposition with a massive win, which investors said was indicative of continuation of business friendly policies.

The Bombay Stock Exchange rose as much as 40,124.96 or 1,014 points, before closing 0.76 per cent lower at 38,811.39. The National Stock Exchange Nifty index rose as much as 12,041.15, before closing 0.69 per cent lower at 11,657.05. The Nifty index has gained 7.31 per cent so far in the year.

“A continuation of Prime Minister Modi’s structural reform agenda would provide a lift to the economy and to corporate India. It would also likely spell good news for stocks,” Kristy Fong, Asian Equities Investment Director, Aberdeen Standard Investments told Gulf News.

7.31%

Gain in Nifty index so far this year, reaching 12,041.15 yesterday

The S&P BSE SENSEX 50 closed 0.67 per cent lower at 12,134.84, while the downside was limited in the mid-cap and small cap stocks. The S&P BSE MidCap closed 0.15 per cent lower at 14,650.37. The S&P BSE SmallCap closed 0.11 per cent lower at 14,352.93.

“An impressive victory during a time when unemployment is off the charts and the rural sector continues to struggle. It appears, Modi will now be able to move forward on infrastructure investments, assistance for farmers and policies that appeal to Hindu nationalists,” Edward Moya, Senior Market Analyst at OANDA said.

Bullish:

Analysts that the prospects of the Indian economy make them bullish on Indian shares going ahead.

“We can expect the government to continue pouring money into affordable housing and transport infrastructure, which bodes well for the cement sector, real estate and potentially rural consumption. It could spark a renewed capital expenditure cycle. All of this would provide a cushion to external headwinds, including a deterioration in the US-China trade conflict and any surge in oil prices,” Fong said.

1,014

Number of points that the Sensex gained yesterday

The Sensex index has gained 8.56 per cent since the start of the year, underperforming the Shanghai Stock Exchange Composite Index, which has gained by 14.38 per cent.

“Political continuity only reinforces our positive views on India, whose growth prospects are underpinned by a young population and expanding middle class. We see a huge opportunity to invest in companies with pricing power that sell to Indian consumers,” Fong said.

Indian rupee weakened past the 70 mark against the dollar, after witnessing appreciation. Indian rupee shed 0.41 per cent to end at 69.960 against the dollar, after appreciating as much as 69.342. Indian rupee has weakened 2.36 per cent in the past one year.