Sensex surges over 2,000 points, Nifty reclaims 22,500 as PM Modi set to return to power

The Indian equity benchmarks staged a strong rebound on Wednesday a day after witnessing worst session in over four years as Prime Minister Narendra Modi-led National Democratic Alliance (NDA) was set to return to power for third time. The Sensex rose as much as 2,125 points and Nifty 50 index moved above its important psychological level of 22,500

As of 2:35 pm, the Sensex was up 2.93 per cent or 2,118 points at 74,196 and Nifty 50 index climbed 669 points to 22,553.

NDA leaders are arriving in New Delhi to discuss the government formation under the leadership of PM Modi and the third NDA government is likely to be sworn in on June 8.

A major ally NDA reaffirmed their support for him on Wednesday and was poised to participate in discussions aimed at forging a coalition government, bolstering PM Modi's prospects for securing a third consecutive term in office.

Telugu Desam Party (TDP) declared its steadfast allegiance to PM Modi and his party. "We remain committed to the NDA. I will be attending today's meeting in Delhi," stated Chandrababu Naidu, the leader of TDP, addressing reporters.

With the NDA securing 293 seats in the 543-member lower house of parliament, surpassing the required 272 threshold for government formation, the alliance's position appears solidified.

Meanwhile, buying was visible across sectors as all the major sector gauges compiled by the National Stock Exchange were trading higher led by Nifty Private Bank index's 4.8 per cent gain. Nifty Bank, Auto, Financial Services, FMCG, Metal, Pharma and Healthcare indices also rose between 3.5-4.5 per cent.

Mid- and small-cap shares were also witnessing buying interest as Nifty Midcap 100 index rose 4.12 per cent and Nifty Smallcap 100 index advanced 3.85 per cent.

IndusInd Bank was top Nifty gainer, the stock rose 7.3 per cent to Rs 1,492. Mahindra & Mahindra, Shriram Finance, Hero MotoCorp, Adani Ports, Tata Steel, Bajaj Finance, ONGC, Hindalco, Divi's labs and Kotak Mahindra Bank also rose between 4-6 per cent.

On the flipside, Bharat Petroleum and Larsen & Toubro were the only losers in the Nifty 50 basket of shares.

The overall market breadth was extremely positive as 2,454 shares were advancing while 1,294 were declining on the BSE.