Reversing early losses, the Sensex and Nifty moved higher as BJP pulled ahead in Karnataka elections. Markets had opened flat as early leads indicated Congress and BJP locked in a close fight in Karnataka, where votes were cast on Saturday.
The Sensex was up over 400 points at 35,991, less than 500 points away from the all-time high of 36,443, hit in January this year. Nifty was firmly above 10,900. The rupee also recovered to 67.55 after falling to 67.77 against the US dollar, its lowest since January 2017. The rupee had ended at 67.51 against the US currency on Monday.
The gains were broad-based today with all sectoral indices trading in the green. Banking, capital goods, and metal stocks led the gains.
Some analysts say that the Karnataka election results will only have a short-term impact on stock markets. In the longer term, they say, the markets will move in tune with fundamentals.