Mumbai: The stock market rallied 139 points on Monday on poll results that the BJP is set to keep power in Gujarat and topple the Congress in Himachal Pradesh, but not before it got a big scare from counting of votes early on during the session.

The start was ominous as the benchmark Sensex crashed 867 points to go below the psychological 33,000 while the NSE Nifty plunged 258 points within one hour of counting of votes that showed both the parties were locked in a tight race. But then, the tide turned as the BJP started to take lead in a majority of seats.

The 30-share BSE index hit a high of 33,801.90 and settled up 138.71 points, or 0.41 per cent, at 33,601.68, its highest closing since November 29 when it had closed at 33,602.76. The gauge gained 409.93 points in the previous two sessions after exit polls had predicted BJP win in Gujarat and Himachal Pradesh assembly polls. The 50-share Nifty reclaimed the key 10,300-mark to close higher by 55.50 points, or 0.54 per cent, at 10,388.75, its highest closing since November 27. It moved between 10,074.80 and 10,443.55 intra-day.

It was an extremely volatile session, borne out by the Sensex swinging over 1,200 points through the day and the Nifty 369 points. "While market sentiment ebbed and flowed, as election results trickled in, PSU bank stocks marched ahead in anticipation of bank recapitalisation updates from the Parliament's ongoing winter session. Investors will now also focus on developments on the GST front, including implementation of e-way bill mechanism," said Anand James, Chief Market Strategist, Geojit Financial Services.

The rupee, which had earlier crashed, making up much of its losses against the dollar came as a big source of support. M&M hit it big in the Sensex team, soaring 2.71 per cent, while Sun Pharma and SBI gained up to 2.06 per cent. In contrast, Yes Bank, Coal India, Infosys, ITC, Kotak Bank, HDFC and NTPC succumbed to rush for taking profit, which narrowed the gains.

The metal index advanced 1.83 per cent, followed by auto consumer durables and healthcare. However, realty finished in the negative zone. Given the improvement in sentiment, the broader markets played along, with the mid-cap index rising 0.76 per cent and small-cap 0.45 per cent. Domestic institutional investors (DIIs) offloaded equities to the tune of Rs 635.44 crore while foreign portfolio investors (FPIs) net sold shares worth Rs 921.03 crore last Friday, provisional figures showed.

PTI