NEW DELHI: A continuation of the BJP-led government at the Centre prompted Dalal Street traders to embark on a euphoric rally that took the sensex beyond the 40k mark for the first time ever. However, as the initial euphoria faded and ground realities struck marketmen, the index came down sharply to close at 38,811 — down 299 points on the day. At close, investors were also poorer by Rs 50,000 crore with the BSE’s market capitalisation now at nearly Rs 150 lakh crore.The sensex opened strong with a 400-point gain, and soon rallied to an all-time peak of 40,125. But from then on, as profit-booking set in, it lost ground. In the last hour of trade, it fell sharply to touch an intra-day low at 38,652, but closed a bit higher from that level. On the NSE, the Nifty too scaled the 12k mark in early trade, but lost steam soon after and closed 81 points lower at 11,657. Despite the day’s slide in the sensex, brokerages are optimistic that the government will push forward with its reforms agenda.With an outstanding mandate for Narendra Modi , “we are confident that under his dynamic leadership, the much-needed reforms will be initiated to take the Indian economy to the $5-trillion level soon”, said IIFL Group MD R Venkataraman. The current size is about $2.5 trillion. The government will now face several hurdles to put the economy on the growth path which has, of late, slowed down significantly with issues like flat corporate earnings, rural distress, liquidity crunch in the system and global trade tensions.Brokers expect Modi to quickly address these issues. According to Motilal Oswal Financial Services cofounder Raamdeo Agrawal, the new government must harness the power of the stock market to fund developmental needs. “The government can get a few lakh crore of rupees through better management of PSUs and their judicious divestment. Further, the government must focus on increasing smooth flow of capital to entrepreneurs,” he said. “Aversion to lend is becoming a bigger problem than availability of liquidity and cost of funds. The new government will have to work closely with the RBI and other capital market participants to resolve this crisis on a war footing,” Agrawal said.According to brokers and dealers, the decisive mandate for the NDA government means there would be continuity of policies and predictability. Market players do not like uncertainty and the Lok Sabha mandate is sure to end the poll-related uncertainty that was there for the last few months. Institutional players also expect foreign funds, which were on a ‘wait-and-watch’ mode for the past few months due to poll-related uncertainties, to invest in the Indian market.On Thursday, BSE data showed that foreign funds net bought stocks worth about Rs 1,350 crore, while domestic funds were net sellers at nearly Rs 600 crore. Among the 30 sensex stocks, 15 closed in the red while an equal number closed with gains. HDFC Bank, HDFC and ITC were the top contributors for the index’s 0.8% fall, while IndusInd Bank, ICICI Bank and L&T were top gainers, which helped cushion the slide to some extent. For Friday, market players expect a flat to negative trading session, which would continue till the new Cabinet and other ministers are in place.