Sensex soars 2,303 points, Nifty tops 22,600 as key allies back BJP to form government

According to media reports, is expected to be sworn-in for a record straight third term on June 8, as and Janata Dal (United) pledged their continued support a day after a humbling election verdict that saw his Bharatiya Janata Party () lose its majority in parliament.

Heavyweight stocks surged 4.5%, while the index jumped 4.2%, driving a surge in the Nifty. Bank stocks had dropped nearly 8% on Tuesday.

Nifty FMCG surged 4.3%, while Auto gained 4.7% on expectations of rural demand. IT index was up 2.4%.

The capitalisation of all listed companies on the BSE surged by Rs 13 lakh crore to Rs 407.8 lakh crore.

Expert View

"The Indian market exhibited a spirited recovery driven by broad-based buying across various sectors, as political stability appears assured. However, attention will remain on the formation of the government and the forthcoming policy meeting," said Vinod Nair, Head of Research at Geojit Financial Services.

“The market does not expect any change in RBI’s policy stance given persistent high food inflation, and an expectation of an increase in government spending, which has led to a notable traction in FMCG stocks," Nair added.

Rupak De, Senior Technical Analyst at LKP Securities, said, "Nifty has shown a sharp recovery, rebounding to touch its 100-day moving average placed at 21,786 and closing above its 21-day EMA. For a bullish or bearish outlook, it's crucial to monitor key levels. If Nifty sustains above its 21-day EMA or 22,500, a buy-on-dip approach is advisable. Currently, 22,400 acts as support, while 22,800 serves as the initial resistance for the Nifty index."

Global Markets

World shares rose on Wednesday and the dollar steadied with a European Central Bank policy meeting coming into focus following soft US labour market data that firmed up bets of a September rate cut by the Federal Reserve.

The MSCI world equity index, which tracks shares in 49 countries, added 0.05%, supported by a positive open in Europe and gains in Asia.

The pan-European STOXX 600 index was up 0.5% and the MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.9%. The Nikkei in Tokyo fell 0.9% as the renewed strength in Japanese yen weighed.

Oil near four-month low

Oil prices hovered near four-month lows on Wednesday on an expected supply boost later in the year when OPEC+ begins to unwind some output cuts, with markets also digesting US jobs data and higher oil stocks.

Brent crude futures were up 17 cents, or 0.22%, at $77.71 a barrel at 4:00 pm IST. U.S. West Texas Intermediate crude futures rose 16 cents, or 0.23%, to $73.39.

Both contracts fell over 1% on Tuesday to their lowest settlement levels since early February, having declined by about $3 a barrel on Monday.

Rupee Ends Higher

The Indian rupee closed stronger on Wednesday, partially recovering from its slump in the previous session, aided by dollar sales from foreign banks and likely intervention from the Reserve Bank of India.

The rupee closed at 83.37 against the US dollar, up nearly 0.2% compared with its close of 83.53 in the previous session.

The dollar index, which measures the US currency against six peers, was 0.1% higher at 104.29, just above the near two-month low of 103.99 it hit on Tuesday.

(With inputs from agencies)