Sebi, SEs step up surveillance of markets on poll results day

New Delhi/ Mumbai: Sebi and the stock exchanges have enhanced their surveillance measures to curb possible manipulative practices as well as excessive volatility in the market on Thursday when the general election results will be announced. Markets are likely to witness significant movements on Thursday, especially after a rally on Monday following exit polls showed that the BJP-led NDA is expected to come back to power.

Surveillance and monitoring of markets have been beefed up by Sebi and stock exchanges for the trading session on Thursday, according to a senior official. Increased monitoring would help in keeping a tab on possible manipulations and increased volatility in the markets. Manipulators tend to exploit such volatile situations in the stock markets.

Movements in Nifty futures and options on the Singapore exchange would be closely monitored. Trading in Singapore stock exchange starts much before Indian markets open and their trends generally have an impact on domestic markets.

The results of the seven-phase polls for 542 seats would be announced on May 23. "Markets could remain volatile on Thursday awaiting results which could take time given the higher proportion of VVPAT (Voter Verified Paper Audit Trail) votes to be manually counted," Deepak Jasani, head of retail research at HDFC Securities, said. On Monday, the Sensex zoomed 1,422 points and the Nifty surged 421 points after most exit polls showed that the Narendra Modi-led NDA is returning to power with a thumping majority in the Lok Sabha elections.

Meanwhile, the benchmark BSE Sensex ended 140 points higher Wednesday, bolstered by gains in banking and auto stocks ahead of the general election results. After swinging over 300 points during the day, the 30-share index ended 140.41 points, or 0.36 per cent, higher at 39,110.21. The gauge hit an intra-day high of 39,249.08 and a low of 38,903.87.

In similar movement, the broader NSE Nifty rose 28.8 points, or 0.25 per cent, to 11,737.90. IndusInd Bank was the biggest gainer in the Sensex pack, rallying 4.84 per cent, followed by Sun Pharma, Bajaj Auto, Bharti Airtel, Coal India, Tata Motors, SBI, ICICI Bank, Hero MotoCorp, ONGC, HDFC, Vedanta, L&T, Kotak Bank, Maruti and Axis Bank, ending up to 2.92 per cent higher. On the other hand, Yes Bank, ITC, PowerGrid, TCS and HUL closed in the red, slipping up to 2.34 per cent. According to experts, investor sentiment turned positive this week after most exit polls forecast a win for the Narendra Modi-led NDA. The results of the seven-phased polls will come out Thursday.

"Post the exit polls, one can say that the markets seem to have priced in a second term for the Modi government. However, lack of majority for BJP will prove to be a dampener for market mood. Hung elections remain a near term threat for the markets.

"Post elections, the focus will revert back to the fundamental issues such as earnings growth and increase in capex," said Hemang Jani, Head (Advisory), Sharekhan by BNP Paribas. Unabated foreign fund inflows too buoyed the market mood here, traders said.