The stock market had a jittery start in the opening hours of trade after early trends for Gujarat elections depicted a close race.

The 30-scrip Sensitive Index of Bombay Stock Exchange and 50-stock Nifty of National Stock Exchange crashed vertically in a most devastating start in recent times which analysts described as ‘meltdown of stock prices as well as investors’ sentiments’.

Within minutes of opening bell, Sensex was down 867.34 points at 32,595.63 points. Nifty at 10,074.80 points cracked 256.45 points. Nevertheless, as tide turned in BJP’s favour, Sensex bounced more than 1,300 points and Nifty staged a splendid come back by regaining nearly 370 points. Analysts say the market may have factored in BJP’s win in Gujarat by the end of day’s trading.

The two main indices did recover as BJP survived strong hiccups but to stage a recovery under such testing conditions has always been a daunting task for the market. The BSE benchmark ended the day 0.41 per cent up at 33,601.68 (+138.71) points, while Nifty at 10,388.75 (+55.50) points increased 0.54 per cent. In Sensex, 23 shares advanced and seven declined. For Nifty, the ratio was 36:14. Nifty Bank ended at 25,594.55 (+154.25) gaining 0.61 per cent. The intra-day swings (between lows and highs) amid Monday’s mayhem for Sensex and Nifty were 1,306.27 points and 368.75 points respectively.

The not-so-comfortable victory of BJP sparked a serious discussion among market participants over the fate of ongoing economic and structural reforms that are being vigourously pursued by the Prime Minister Narendra Modi. The moot point being debated by the analysts is whether the government would dilute its reform agenda with 2019 Parliament election in mind to win back its eroding rural base that contracted at least in Gujarat.

According to Religare Securities’ Jayant Manglok, there would be a temptation for the government to try and appease voters. ICICI Securities’ Pankaj Pandey commented, “as most major reforms are already in place, the market will focus on earnings growth in the year ahead.

We are expecting double-digit earnings growth next year with 12 to 13 per cent upside in the Nifty in 2018.”

As the indices turned green, the rally was once again led by heavyweights Mahindra and Mahindra, HDFC Bank and Maruti Suzuki. They hit fresh record high in the afternoon session. M&M crossed `1,500 level and was trading intra-day at `1,534 up 3 per cent on strong buying demand in two sessions. The share was up nearly 7 per cent following the company’s announcement to increase prices of passenger and commercial vehicles by up to 3 per cent from 1 January 2018. Besides the stock will be going ex-bonus on 21 December in the ratio of 1:1.

HDFC Bank share gained 4 per cent intra-day crossing `1,900 level after the private lender declared plan to raise capital via QIP. Top gainers in BSE benchmark included M&M at `1,522.85(+2.71 per cent), SBI at `318.90 (+1.93 per cent), Wipro `295.30 (+1.90 per cent) and MSI at `9,308.05 (+1.57 per cent).