BENGALURU: India’s benchmark indexes hit fresh record highs on Tuesday, led by gains in financial and energy stocks, while victories for the ruling party in state elections boosted momentum.

The NSE Nifty 50 index rose 0.81% to 20,855.10 points, while the S&P BSE Sensex advanced 0.63% to 69,296.14, marking record closing for both indexes.

Financial services-linked indexes like financials, banks, public sector banks and private banks gained between 0.9% and 1.5%, on the day.

Several brokerages picked financials and large-caps as their top preferences, anticipating a rally in domestic equities ahead of 2024 general elections.

HDFC Bank, ICICI Bank, Axis Bank and State Bank of India added between 0.6% and 2.3%.

India’s ruling Bharatiya Janata Party won assembly elections in three key states, results showed over the weekend.

India’s Nifty, Sensex touch new highs on key wins for the BJP

“The market is taking comfort from the victory of BJP due to hopes of policy continuity in 2024, focusing on growth rather than fiscal populism,” said Sanjeev Hota, vice president and head of research at Sharekhan by BNP Paribas.

The return of foreign inflows driven by expectations of a U.S. rate cut in March 2024 could stir an upswing in large-cap stocks, Hota added.

The more-domestic focussed small- and mid-caps have climbed 48.53% and 40.03%, respectively, so far this year, outpacing the 15.19% rise in Nifty 50 index.

Energy stocks extended gains, rising 3.24%, aided by an uptick in Adani group stocks, key constituents in the index and stabilisation of Brent Crude futures at around $79 per barrel.

Adani stocks jumped between 7% and 20%, extending their rally into the second consecutive session. Adani Enterprises and Adani Ports and Special Economic Zone were the top Nifty 50 gainers.

Global stock markets were subdued as investors awaited key U.S. labour market data, which holds sway on the Federal Reserve’s interest rate policy.