Markets ride high on decisive BJP win

MUMBAI: The BJP-led coalition’s strong showing in state elections has instilled confidence among Dalal Street investors that the Central government will not resort to populist measures in the run-up to the Lok Sabha elections in mid-2024, which had the potential to hurt the fiscal positions of the country.
This confidence on Monday translated to strong buying by investors of all categories that pushed the sensex up by 1,384 points – its biggest single-session gain since May 2022 – to close at 68,865, after touching a new all-time peak at 68,912 points.Of the 30 sensex constituents, 27 closed higher. On the NSE, the Nifty also scaled a new life high at 20,702 points, and closed at 20,687 – up 419 points.
India’s equity markets have given a clear thumbs up to the state outcome with a 1,000-point-plus rally in the sensex, said A Balasubramanian, MD & CEO, Aditya Birla Sun Life Mutual Fund. The government’s initiatives such as building strong infrastructure, ‘digital India’ and ‘Make in India’ are some of the pro-growth initiatives which have been well received by the market, he said. “The equity market looks at how money is being spent effectively and the sustainability by way of policy making and the market reaction is a clear endorsement of growth and not driven by freebies,” Balasubramanian said.

The day’s rally added about Rs 7.5 lakh to investors’ wealth with BSE’s at now just above the Rs 350-lakh-crore mark for the first time ever.
Monday’s surge was led by domestic investors who net bought stocks worth about Rs 4,800 crore while foreign fund net infused nearly Rs 2,100 crore, BSE data showed. So far this month, foreign funds have net bought stocks worth about Rs 17,500 crore, more than the Rs 9,001 crore figure for November.
The day’s rally also took the market cap of Bajaj group to above Rs 10 lakh crore, making it the fifth business group to cross this valuation milestone.
Among the sensex stocks, HDFC Bank, ICICI Bank and L&T contributed the most to index’s gains while selling in Wipro, Tata Motors and Titan limited the gains, but only marginally, BSE data showed.
Technically, the market is poised for more upside that could take the Nifty closer to the 21,000 mark while the sensex could surge above the 70,000-level.
According to Rupak De of LKP Securities, technically, the Nifty is above the critical resistance level of 19,850. The overall sentiment appears highly bullish and any downside could be considered if it falls below the 20,400 level. “On the higher end, the index might move towards 21,000,” De wrote in a note to investors.