VR Logo

Sensex Gains 4.1%

Poll-related speculation charged-up the markets

Sensex came charging out of a two-day fall and emerged on Tuesday with a gain of 4.1% that translated into a close that was the highest seen in last seven months.

While there was nothing in the index of industrial production (IIP) to send markets into overdrive mode, and even with analysts explaining away the recent market rally by saying the stock markets tend to rise before the economic data starts showing tangible gains, yet none of this added up to a gain for Sensex of 475.04 points to 12,158.03 points, which it actually did.

What may well have caused the bourses to verge towards a bumper harvest on the day is the issue being played out in every home and on the media 24/7 -- the general elections, which are winding down to their finale.

However, as the vote count day is still far off, this may well be called punting from a standpoint of 'intelligent guesswork'. The general framework of this mindset is that with the Congress and its allies tying themselves in knots over recent weeks, the likelihood of it coming to power remains remote, since this time too the people are likely to give a fractured mandate. That gives the BJP, which also suffered a few reverses on the ally front in Orissa, the advantage as its NDA alliance is still tight enough, leaving it in a better government-formation position. The reason that the markets may be rooting for BJP may also stem from the fact that this will totally preclude any chance of the Leftists coming into the picture during government-formation times.

In effect, what traders have done is trade on election expectations while at the same they are ignoring the weak, yet accurate, industrial data (fell 2.3 percent from a year earlier) -- betting in short.

The broad based Nifty registered a jump of 126.5 points or 3.56 per cent and closed at 3681.10 points.

The biggest gainers on the Sensex were HDFC, ICICI Bank, Airtel and Infosys.

Sensex Rise*
Date  % change
23/01/2008 5.17
25/01/2008 6.62
14/02/2008 4.82
25/03/2008 6.07
02/07/2008 5.42
09/07/2008 4.60
17/07/2008 4.26
23/07/2008 5.94
19/09/2008 5.46
13/10/2008 7.42
21/10/2008 4.50
28/10/2008 5.86
31/10/2008 8.22
03/11/2008 5.62
10/11/2008 5.74
21/11/2008 5.49
04/12/2008 5.51
10/12/2008 5.37
13/03/2009 4.95
23/03/2009 5.10
02/04/2009 4.51
04/05/2009 6.41
12/05/2009 4.10
*When index jumped in excess of 4%