Modi condemned the London attack. Photograph: (Reuters)
Investors are betting the victory in UP will embolden the ruling BJP to embark on more reforms including launching the GST
The Sensex's gains slipped, but the gauge is still trading higher today by 482 points, powered by a huge sweep by the BJP in Uttar Pradesh and Uttarakhand and a higher probability of the party forming government in other states.
The broader Nifty came off from record highs while holding on to the key 9,000 level.
Solid IIP numbers and strong FII inflows bolstered sentiment too.
Barring telecom counters which witnessed profit- booking, buying was led by capital goods, financials, realty, industrials and auto, among others.
The Sensex opened gap-up at 29,437.23 and hovered in a range of 29,561.93 and 29,356.05 before trading at 29,428.40 at 1155 hours, a gain of 482.17 points, or 1.67 per cent.
The NSE 50-share Nifty was also up 146.65 points, or 1.64 per cent, to quote at 9,081.20 at 1155 hours.
Major gainers were ICICI bank (5.82 per cent), L&T (4.17 per cent), HDFC (3.39 per cent), ITC (2.39 per cent) and Asian Paints (2.27 per cent).
Meanwhile, foreign funds bought net Rs 412.14 crore last Friday, as per the provisional figures.
India's wholesale prices rose a more-than-expected 6.55 per cent year-on-year in February, compared with a 0.85 per cent fall a year ago, driven by fuel and food prices, government data showed on Tuesday.
The data compares with a 5.90 per cent annual rise forecast by economists in a Reuters poll. In January, prices rose a provisional 5.25 per cent, the fastest pace in two-and-a-half years.
Last month, wholesale food prices rose 2.69 per cent year-on-year, compared with a provisional 0.56 per cent fall in January.
Annual rate of inflation, based on monthly WPI, stood at 6.55% for February, 2017 as compared to 5.25% for previous month.— ANI (@ANI_news) March 14, 2017
Modi's victory "is a huge confidence boost for reform and is another step on the way to a story that could place him as one of the most successful reformers in history," said Simon Quijano-Evans, investment strategist at Legal & General Investment Management in London.
The prime minister's win should bode well for foreign portfolio investment in India.
Foreign investors have already started returning to the country, having bought a net $1.5 billion in equities and $887.3 million in debt in February, following four consecutive months of net sales. They have remained net buyers in March.
But expensive valuations and caution due to an anticipated rate hike by the US Federal Reserve this week could temper gains.
Indian shares are trading at a price-to-earnings ratio of 19.85 over the next 12 months, compared with their five-year historic average of 17.8, according to Thomson Reuters data.