Mumbai, May 23 (IANS): Indian equities seem to now have discounted the return of Prime Minister Narendra Modi. The Sensex after surpassing the historic highs is trading just over 300 points higher.

At 1.27 p.m., the Sensex was up by 338.65 points or 0.87 per cent to 39,448.86 after its surpassed the 40,000 mark within minutes into Friday's trade.

"Indian equity market as expected touched the historic figure of 12,041 and made a new all-time high. Markets seem to have discounted the magical mandate in favour of BJP. At the same time, we see there is some profit booking that is coming in at higher levels," said Mustafa Nadeem, CEO, Epic Research.

It touched an intra-day and lifetime high of 40,124.96 and a low of 39,216.90. The Nifty too, was just 111.65 points or 0.95 per cent up at 11,849.55.

However, the movement in the broader markets was tipid. The S&P BSE Mid-Caps was up 0.76 per cent while the small caps were 0.46 per cent up.

"Broader market health is improving but we are seeing lack of momentum and hence expecting consolidation in the near term," said Sahaj Agrawal, Head of Derivatives, Kotak Securities.

Proving exit polls right, the BJP led by Prime Minister Narendra Modi on Thursday appeared set to retain power as its candidates alone led in 294 of the 541 Lok Sabha seats with its allies faring equally well across the country, stunning the opposition.