May 20, 2019 / 4:00 AM / 5 months ago

Indian shares clock record closing levels on likely Modi win

A man walks past a screen displaying news of markets updates inside the Bombay Stock Exchange (BSE) in Mumbai, May 20, 2019. REUTERS/Francis Mascarenhas

(Reuters) - Indian shares surged to record closing levels on Monday, with gains spread across most sectors after exit polls indicated Prime Minister Narendra Modi would retain power with an even bigger mandate than in 2014.

Exit polls predicted an overwhelming victory for Modi’s National Democratic Alliance (NDA), which is expected to win between 339 and 365 seats in the 545-member lower house of parliament when votes are counted on Thursday.

The BSE Sensex closed up 3.75% at 39,352.67. The NSE Nifty ended 3.69% higher at 11,828.25.

“What would help the markets sustain are factors like decisive policy initiatives from the new government, faster land and labour reforms, and also the unfinished task of quick consolidation and re-organisation of the banking system,” said Joseph Thomas, head of research at Emkay Wealth Management.

Both indexes recorded their biggest intra-day percentage gain since May 16, 2014 when Modi won his first term.

Financials led the gains with Indiabulls Housing Finance Ltd closing 12.6% higher while State Bank of India ended up 8%. Index heavyweight Housing Development Finance Corp rose nearly 6.5%.

Technical analysis showed the NSE Nifty at an RSI level above 60, indicating further upside.

Reporting By Arnab Paul in Bengaluru; editing by Gopakumar Warrier

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