NDA victory: Massive profit booking fades historic market surge

The BSE Sensex jump-started to cross the 40,000 mark for the first time ever on Thursday with the ruling NDA leading the Lok Sabha vote count from early in the day. In an unexpected turn, however, the markets witnessed a sharp fall in the second half owing to profit booking that washed away all the early gains.

From the historic peak of 40,124.96, reached within an hour of market opening, the Sensex ended trade on counting day at 38,811.39, which was over 1,300 points lower than the highs reached earlier. With the National Democratic Alliance (NDA) leading the vote count from the beginning, the markets saw a massive gap-up opening. The morning gains went up to the magical figure of 12,000 (Nifty50) but then saw a sudden fall, said Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking.

“In fact, the profit taking was so immense, we not only wiped off all gains but also went on to sneak into well inside negative territory,” Chavan added.

As political uncertainty went out of the picture, the volatility index or the India ‘VIX’ dropped by nearly 30 per cent during the trade session.

The Sensex closed in the red, 298.82 points lower, or by 0.76 per cent, at 38,811.39. It hit an intra-day high of 40,124.96, and a low of 38,651.61.

The Nifty also declined on Thursday by 80.85 points, or 0.69 per cent, to 11,657.05 after it had touched a lifetime high of 12,041.15.