Sensex shrugs off Patel's exit

MUMBAI: Putting aside the concerns regarding the sudden exit of RBI governor Urjit Patel and the electoral setback suffered by BJP in the recently concluded state assembly polls, the equity markets staged a spectacular rally from the deep cuts suffered in the opening hours to end the session on a positive note.

The Sensex soared 723,72 points from its day’s lows after shedding 533 points in the opening trade to finally end the session at 35,150.01, up 190.29 points or 0.54 per cent from its previous close. The Nifty closed the session at 10,549.15, up 60.70 points or 0.58 per cent.

“The markets hates uncertainty. With the uncertainty over the state assembly election over, the focus has shifted towards inherent value. The markets are available at 18 times one year forward valuations and therefore unfolding of events will lead to value investments being chased. The markets will return to merit based investing as overhang of election results is out of the way now,” said Deven Choksey, MD at K.R.Choksey Securities.

Experts added that a rally in global stocks after the US and China resumed their trade dialogue also helped attract fresh buying at lower levels.

Additionally, the appointment of former economic affairs secretary Shaktikanta Das as the new governor of RBI is also expected to soothe investors nerves.

According to the provisional data released by the stock exchanges, foreign portfolio investors (FPI) offloaded equities worth '2,421.06 crore while domestic institutional investors such as insurance firms and mutual funds pumped in '2,255.68 crore.  

“The poll outcome was more or less in line with what the exit polls had predicted. What the markets want is a stable government which is not anti- business. So it doesn’t matter whether it’s the ruling BJP or the opposition Congress. That is why, it seems the markets have reacted positively to the strong bounce back registered by the opposition Indian National Congress,” said Ambareesh Baliga, a senior research analyst.

However, the rupee despite staging a late recovery ended 53 paise lower at '71.85 against the dollar on Tuesday.

In early trade, the rupee had plunged as much as 110 paise on Tuesday.