Benchmark indices ended the day significantly higher, as markets are now betting on a BJP victory in 2019 central government elections, following a spectacular show in the state elections of Uttar Pradesh andd Uttarakhand.
The Sensex ended the day with gains of 496 points, while the Nifty hit a new lifetime high and ended the day with gains of 152 points. It was also the first time the Nifty clsoed above the 9,000 points mark.
The big gainers in trade were ICICI Bank, which jumped as much as 5 per cent, while other notable gainers were Larsen and Toubro, Sun Pharma, Hindustan Unilever and Sun Pharma. Most of the banking stocks were in action including the PSU banking stocks. Shares in Gitanjali Gems also jumped following its subsidiary filing for an IPO. The stock ended 5.6 per cent higher. Marathon Nextgen jumped 16 per cent, after reports that its board is to consider share buyback and new project proposal on March 17.
Among the stocks that lost ground was Coal India, which dropped 5 per cent, after going ex dividend. Telecom stocks also came under some intense selling pressure with Bharti Airtel and Idea Cellular both among the losers. Bosch and Axis Bank were other stocks that dropped in trade despite a resurgent market.
All eyes on the US Fed
All eyes would now be on the US Fed, which is slated to conclude its 2-day meet in which it is largely expected to raise interest rates. This could spoil the rally and in fact if the signal is more hawkish, it could lead to some selling pressure in the markets. A statement from the US Fed is expected later on Wednesday or in India it would be a Thursday. A sharp rise in interest rates always tends to spoil the market party.
Valuations maybe now stretched
Analysts are now warning investors to stay away from the markets as valuations at the moment maybe a little stretched. Those who are holding on to shares may hold, but taking fresh positions from here may tantamount to taking some risk. There is no earnings recovery that has happened and inflation is also showing signs of spiking.