As the Sensex surged to a new closing high of 23,551 and the Nifty crossed the psychological 7,000-mark on Monday, experts cautioned that the markets may correct during the week if political numbers don’t come through and advised investors to take a long-term view while avoiding risky bets.

The 30-share Bombay Stock Exchange benchmark index jumped 556.77 points, or 2.42%, to a new closing high of 23,551, while the broader NSE Nifty rose 155.45 points, or 2.27%, to end at an all-time high of 7,014.25. Intra-day, the Sensex rose to an all-time high of 23,572.88, surpassing its previous high of 23,048.49 and the Nifty touched 7,020.75, breaking the earlier record of 6,871.35.

“The rally is not based on fundamentals and may not be sustainable. Retail investors should stay away,” said Kulbir Suri, managing director of KS Investment Services, a boutique investment firm.

Stocks have been running up on expectations that Narendra Modi-led Bharatiya Janata Party would form a government, but even if that happens, the sagging economy would not be immediately revived, said experts.

This exuberance is irrational. Even if Modi comes to power, it will take him time to put the economy back on the rails. My advice is to stay away from stocks right now",Parag Parikh, chairman of Parag Parikh Financial Advisory Services, a leading financial services firm, had told HT after Friday’s rally in which the Sensex gained 650 points.

Of the 30 Sensex companies, 25 gained led by Coal India (up 7.00%), HDFC Bank (up 4.59%) and Tata Motors (up 4.09%).

Among sectoral indices, oil & gas rose 3.07%, followed by power (up 2.98%), auto (up 2.88%) and capital goods (up 2.78%).

As many as 189 stocks hit their 52-week highs on the BSE including Axis Bank, Coal India, Maruti Suzuki and RIL.

Political numbers from the exit polls will move markets in the days ahead, experts said. In case the BJP-led National Democratic Alliance does not win the requisite seats to form the new government, shares could plunge by as much as 8-10% in one day, and up to 20% in the aftermath, according to analysts.

“There may be a correction in equities in case of exit polls predicting less than 240 seats,” said Vinod Nair, research head, Geojit BNP Paribas. “Investors should stay invested in the market, provided the numbers come through.” Of course, exit polls have not always been right, either.

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