Indices peaked another record high for the third time in succession on Tuesday.
The BSE Sensex pierced the 24000 mark, rising to 24,068.94 before settling lower to 23,871.23, while the broader index, NSE Nifty, hit a new record high of 7,172.35 before closing at 7108.75.
Both, Sensex and Nifty ended the day higher by 320.33 points, or 1.36%, and 94.50 points (1.35%), respectively. The volatility index closed down 13.63% at 32.05.
The mood was upbeat post the exit polls that predicted a clear win for Bharatiya Janata Party and its alliance.
However, the higher levels on the indices could not be sustained on profit-taking by domestic institutional investors that sold Rs 649.42 crore of stocks, as per provisional data released by the exchange.
Market participants expect some retracement on Thursday as profit-taking could continue at higher levels. However, over the immediate term, the bullishness is expected to stay, said most market participants.
Foreign institutional investors remained net buyers of equities at Rs 2,026 crore, taking the total in the last three trading days to Rs 4,500 crore, and for the month to Rs 6,048 crore. The inflows have had some impact on the domestic currency which has gained due to the glut of foreign exchange. The rupee opened on Tuesday firmer at Rs 59.74 to the dollar as against the previous close of Rs 60.05 and ended at 59.67 to the greenback.
Bank dealers said the strengthening of the rupee was largely on account of surplus foreign currencies chasing the rupee following the upbeat mood on the stock markets.
Meanwhile, yields on the 10-year benchmark government bonds showed signs of firming up. Prices of 8.83% G-secs, 2023 fell from the previous level of Rs 100.65 to Rs 100.29 at close leading to a rise on yields from 8.73% to 8.78%.
Of the 50 stocks on Nifty, 39 advanced, 10 declined and one remained unchanged. Stocks that were significantly higher from Monday's close were Bhel at Rs 219.25 (up 10.37%), Hero MotoCorp Rs 2,441.40 (6.02%), Ambuja Cement Rs 221.80 (4.89%), Bank of Baroda Rs 878 (4.54%) and DLF Rs 152.40 (4.24%).
Market participants are anxiously awaiting Friday when the official poll results will be declared. "The market is expected to resume its upward climb then on," said a dealer at a brokerage. "But once the results are out, the next trigger would be the Budget of the new government, which is expected to be around June," he said.
Meanwhile in late trades Nifty futures on the Singapore Exchange were trading marginally above its previous close by 14.75 points (0.21%) at 7131.75. The trend is likely to reflect on the Indian bourses when the market resumes trading on Wednesday, dealers said.