The election results not only dampened the equity market sentiments but also dragged the Indian rupee down by 56 paise to close at its 15-month low of 68.08 against the U.S. dollar from its previous close at 67.52 per greenback. According to Motilal Oswal Securities head (retail research) Siddharth Khemka, investors usually prefer a stable government and a decisive mandate is something the markets always take positively.
At the same time, the market will try to focus back on macro and micro economic parameters which have been unpleasant in the recent time, he said. While the Congress had won 65 seats and was ahead on 13, a total count of 78 seats.
Investors who had created huge position after early trends on hopes of BJP win trimmed their bets after the saffron party seat prospects shrank.
The 30-share BSE Sensex was up 351.17 points or 0.99 percent at 35,907.88, and the 50-share NSE Nifty rose 93.30 points or 0.86 percent to 10,899.90. Bank Nifty is also slightly off day's low; immediate support is now placed at 25,950 levels.
In January 2008, the BSE had recorded its biggest fall, losing over 2,000 points in just two consecutive sessions. It touch a low of 10,781.40.
In terms of investments, provisional data with the exchanges showed that foreign institutional investors sold scrips worth Rs 518.47 crore, while the domestic institutional investors bought stocks worth Rs 531.33 crore.
Lupin, Power Grid, Tata Steel, Tata Motors, TCS and Tech Mahindra were early gainers. With more results scheduled in the next 1-2 weeks, stock specific volatility is likely to remain high. The Oil & Gas Index was up 0.15 per cent and the Bankex, up 0.17 per cent, outperformed the Sensex.
All sectors are in the green list, with banks and metals leading the charge while the broader markets underperformed front-liners, with the Nifty Midcap rising 0.4 percent.
This is the lowest closing for the rupee since January 24, 2017 when it had ended at 68.15 against the United States dollar.
On Monday, the company reported 14.2 percent increase in its standalone net profit to Rs 1,351 crore for the fourth quarter ended 31 March, driven by a strong double digit volume growth. China is the biggest Asian economy, which is why all Asian markets also suffered from its own downturn.
Japan's Nikkei was down 0.21 per cent, Hong Kong's Hang Seng fell 1.23 per cent, while Shanghai Composite Index rose 0.57 per cent.
Brokers said apart from political uncertainty in Karnataka, a weak trend at other Asian bourses following overnight losses at the Wall Street dampened sentiments.