Markets opened on a high note on Tuesday, three days after the Bharatiya Janata Party recorded its biggest win Uttar Pradesh in 37 years. The Nifty finished 140.25 points higher at 9,074.80, going past the 9,050-mark for the first time ever. The Bombay Stock Exchange Sensex, on the other hand, surged 496.4 points to close at 29,442.63.

The Nifty gained over 2% or 188.20 points when it opened to reach 9,122.75. During the opening session, the Sensex had gained 2.13% or 615.70 to stand at 29,561.93. The Sensex was about 500 points away from an all-time high, Mint had reported at 9.45 am.

The BJP’s landslide victory – winning 312 out of 403 seats in the Uttar Pradesh Assembly elections - raised expectations of political stability and the smooth implementation of the Goods and Services Tax. Apart from Uttar Pradesh, the BJP also won in Uttarakhand and managed to form the government in Goa and Manipur, where it joined hands with regional parties.

All stocks on the Sensex were trading in green, and all sectoral indices besides the BSE Metal index were also trading higher on Tuesday morning. ICICI Bank Ltd was up 4.6%, while Housing Development Finance Corp. Ltd rose 3.2%.

However, shares of Alkem Laboratories fell over 2% to Rs 1,931 after the company said that the US health regulator issued three unfavourable observations after inspecting its Baddi plant, according to Business Standard. Overall, as many as 1,684 shares soared while 1,167 shares dropped. Around 198 shares remained unchanged, reported Moneycontrol.

Market analysts had expected stocks to rise and touch new highs. “The stock market will surely rejoice with a possible 150 point rally on the Nifty. The victory firmly puts the central government’s focus back on the reform path, which will enthuse markets minus any farm waiver as promised on win in UP,” Amar Ambani, head of research at financial services firm IIFL, had told Mint.

However, this surge is likely to fizzle out. The possibility of an interest rate hike by the US Federal Reserve later this week will keep the markets on tenterhooks. The Federal Reserve will meet on March 14-15. Earlier, chairperson Janet Yellen had said that a rise in interest rates could be “appropriate”.