Historic Surge in Indian Stock Market: Sensex and Nifty 50 Achieve Record Gains

In a remarkable display of investor confidence, the Indian stock market experienced its largest single-day gain in three years on Monday, June 6. The Sensex and Nifty 50 indices soared, marking a milestone not seen since January 2021, fueled by optimism surrounding exit poll results that forecast a decisive victory for Prime Minister Narendra Modi’s National Democratic Alliance (NDA) in the upcoming general elections.

The Sensex opened significantly higher at 76,583.29, up 2,622 points from its previous close of 73,961.31, and surged further to hit a fresh record high of 76,738.89. It eventually closed with a substantial gain of 2,507 points, or 3.39%, at 76,468.78, with 25 of its 30 stocks in the green. Similarly, the Nifty 50 opened 807 points higher at 23,337.90, peaked at 23,338.70, and ended the day at 23,263.90, up 733 points, or 3.25%.

This surge was mirrored across the broader market, with the BSE Midcap index reaching a new all-time high of 44,560.97 before closing 3.54% higher at 44,367.67. The BSE Smallcap index also set a fresh record high of 48,973.96 and settled with a gain of 2.05% at 48,232.30. The overall market capitalization of BSE-listed firms rose to nearly ₹426 lakh crore, up from ₹412 lakh crore, enriching investors by about ₹14 lakh crore in a single session.

The rally was broad-based, with significant buying in large-cap, mid-cap, and small-cap stocks. Key sectors such as Public Sector Undertakings (PSUs) and the Adani Group were among the top gainers. Notable performers included Reliance Industries, SBI, ICICI Bank, Axis Bank, Larsen & Toubro, Mahindra & Mahindra, Bharti Airtel, NTPC, and Power Grid, many of which hit fresh 52-week highs during the trading session.

The Nifty Bank index also saw a substantial rise, gaining 1,996 points to close at 50,980, reflecting strong performance in the banking sector. Midcap and small-cap indices joined the rally, both soaring nearly 3-4% to new record highs, indicating widespread investor confidence.

Market sentiment was buoyed by predictions of political stability and policy continuity, with the BJP-led NDA expected to secure more than 350 seats, according to multiple exit polls. This optimism was further supported by robust economic growth prospects and positive GDP figures announced on Friday. Additionally, a recovery in the US markets contributed to the upbeat mood.

Despite the overall bullish sentiment, some caution was advised. The market had experienced volatility in May, with the Nifty 50 and Sensex breaking a three-month winning streak. The volatility index, India VIX, surged by 91% during May, reflecting election-related uncertainties. Analysts, including Ajit Mishra from Religare Broking Ltd., emphasized the potential for high volatility as the official election results approached, warning that a significant deviation from exit poll predictions could trigger profit-taking.

Foreign Institutional Investors (FIIs) also played a notable role, holding substantial short positions in index futures. Anshul Jain of Lakshmishree Investments & Securities Ltd. highlighted this technical pattern, noting that historically, such positions have preceded a medium-term market bottom followed by a rally.

As the nation eagerly awaits the final election results, the prevailing sentiment remains one of cautious optimism. The Indian stock market’s stellar performance underscores the profound impact of political developments on investor sentiment and market dynamics. All eyes will be on the indices to see if they can sustain their upward trajectory or if post-election realities will prompt a reassessment of market positions.