Sensex Breaks Above 25,000 Ahead of Modi's Swearing-In
The BSE Sensex jumped over 450 points to edge above the psychological 25,000 levels - last seen on May 16, when Narendra Modi won a landslide victory in elections. The broader Nifty jumped over 130 points to regain 7,500 levels, earlier hit also on May 16. (Track markets)
Over the weekend, Prime Minister-designate Mr Modi confirmed that he will head a leaner Cabinet than his predecessor Manmohan Singh did. An official statement said on Sunday that Mr Modi has "adopted (the) guiding principle of 'minimum government and maximum governance' and also rationalization with a commitment to bring a change in the work culture and style of governance."
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Mr Modi is expected to merge and restructure several ministries like, sources said, transport, which could include surface transport, shipping, metro, bullet trains and even perhaps Railways and civil aviation.
These decisions seem to have gone down well with investors, analysts said.
Post the cabinet announcement later today, the government's comments on fiscal deficit, inflation, and the relationship with central bank governor Raghuram Rajan will be of prime importance to investors.
That could help sustain gains for the BSE Sensex, which on Friday became the best performing equity index in Asia-Pacific for 2014.
Overseas investors continue to be buyers in the markets, supporting bullish sentiments on the Street. On Friday, FIIs bought shares worth Rs 417 crore, taking their total investment this year to over $7 billion.
Capital goods stocks led the rally, rising over 4 per cent, while power stocks also saw strong buying with the BSE sectoral sub-index advancing over 3 per cent. Metals, power, auto and PSU shares traded with 2-3 per cent gains. (Track top gainers and losers)
L&T rose 7 per cent to Rs 1,618.95 and it was biggest gainer among Nifty stocks. Among other Nifty gainers, utility vehicle maker M&M traded 5 per cent higher, while Maruti Suzuki jumped 4 per cent. Cement stocks such as Ambuja and Grasim also saw buying interest.
Only eight Nifty stocks traded lower. Asian Paints fell 1.2 per cent, while Hindalco traded 0.85 per cent lower.
As of 11.40 a.m., the Sensex traded 433 points higher at 25,126, while the Nifty advanced 123 points to 7,490. (With inputs from Reuters)
