After opening the day deep in red, share markets in India made a smart recovery and witnessed buying activity throughout the day to end on a positive note. Gains were seen across most sectors with stocks in the metals sector and stocks in the auto sector, leading the gains.

At the closing bell, the BSE Sensex stood higher by 139 points (up 0.4%) and the NSE Nifty closed up by 55 points (up 0.5%). The BSE Mid Cap index ended the day up by 0.8%, while the BSE Small Cap index ended the day up by 0.5%.

Asian stock markets finished in green. As of the most recent closing prices, the Hang Seng was up by 0.7% and the Shanghai Composite was flat. The Nikkei 225 was up by 1.5%. European markets too were trading on a positive note. The FTSE 100 was up by 0.4%. The DAX was higher by 1.2% while the CAC 40 was up by 1.1%.

The rupee was trading at Rs 64.21 against the US$ in the afternoon session. Oil prices were trading at US$ 57.7 at the time of writing.

Market sentiment today was driven by the Gujarat and Himachal Pradesh (HP) elections.

At the time of writing, final voting trends showed BJP leading Gujarat polls with over 100 seats. The same is the case in HP, where BJP is leading polls with 44 seats.

This was not the case earlier today when the opposition Congress was leading the vote count, with 85 seats. At that point in time, BJP was ahead only in 79 seats.

BJP needs a total of 92 seats to retain power in Gujarat and 35 seats to retain power in HP.

There are high stakes involved as the outcome of this election would determine the direction of the country's reforms and policies in the runup to the 2019 elections.

The outcome is also important for the Indian stock markets. As Ankit writes in one his editions of Equitymaster Insider…” stock market valuations in India seem to reflect what I call the ‘Modi market premium'”. You can read his entire note on this topic here (requires subscription).