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.
Also Read: Assembly Election Results 2023 Live: 3/3 for BJP in heartland, Cong left with Telangana
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. 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.
Also Read: Nifty uptrend will continue, says Siddhartha Khemka. Here are his stock picks
If Nifty 50 sustains above 20,430, it can test 20,620-20,810 during the week, Amit Kumar Gupta, Research Analyst at Fintrekk said. “Bank Nifty can also test 46,120 as immediate resistance with a 5-7 percent rally immediately if that level breaks out on the upside. Valuation comfort is less in small and mid-caps though stock-specific returns may continue,” said Gupta.
Rajesh Palviya, Head - of Technical & Derivative Research, at Axis Securities expect a gap-up opening on December 4. "Monday might be bullish with Nifty potentially hitting 20,500 and Bank Nifty reaching 45,600-45,800 levels," Palviya said.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
