Markets likely to gain further as BJP sweeps MP, Rajasthan, Chhattisgarh
Analysts says a decisive win for the BJP in key states would send a strong message to investors betting on India’s rising growth potential
If Nifty 50 sustains above 20,430, it can test 20,620-20,810 within the next week
The market is expected to react positively to the outcome of the state elections, with the BJP’s massive victory in Madhya Pradesh, Rajasthan and Chhattisgarh on December 3, analysts said. While the BJP is set to form the government in three Hindi heartland states, the Congress could only manage to win in Telangana.
“If the final results of the state elections are in BJP’s favour, we expect markets to further cement gains. The image of the BJP as a pro-reformist and the performance of the economy on various fronts, especially during the COVID period and gloomy global economic situation, have provided market participants confidence that a dual-aided right-wing government is beneficial in the longer term,” Swapnil Shah, Director – Research, StoxBox.
Ahead of the 2024 general elections, a decisive win for the BJP in key states would send a strong message to investors betting on India’s rising growth potential and position the country on a stronger footing as compared to its peers, Shah said.
“Results favour BJP, boost market’s confidence of political continuity post 2024 Lok Sabha Elections. It augurs well for India’s macro & policy momentum. Expect the market to get into pre-election rally mode,” reported CNBCTV-18 citing Motilal Oswal Financial Services.
The Nifty hit a new high on December 1. The 50-stock index closed 134.75 points or 0.67 percent higher at 20,267.90 after zooming to a record high of 20,285.15. The Sensex which settled 492.75 points or 0.74 percent higher at 67,481.19 was about 400 points shy of its record high of 67,927.
Deepak Jasani, Head of Retail Research at HDFC Securities, expects a 1-1.5 percent surge in the market when it resumes trading on December 4. The benchmark indices are unlikely to see big gains of 3-4 percent, as the BJP’s performance was already factored in the previous week’s gains.
“Investors might take profits after recent gains in Adani. Watching how foreign investors react to election results; if they keep buying, market momentum should stay. After the election, focus shifts to RBI, Fed actions, global tensions, and the May general election,” Jasani added.
