Nifty, Sensex close strong on BJP-led Mahayuti alliance win but shed partial gains

As a result, PSU stocks traded in the positive following a triumphant victory in the Maharashtra Assembly elections. Shares of PFC, IRFC, BEL, Central Bank of India, RVNL, Bharat Dynamics, NBCC (India), GAIL, Concor Corporation of India, and SAIL, among others, surged in trade. As early as last week, the share of public sector companies (PSUs) in India’s total stock market capitalisation declined to an 11-month low in November amid sharp corrections.

Also read: Broader market shines amid rally in PSU stocks; Smallcap, midcap indices surge 2%

Major sectoral gainers included the PSU Bank index, Nifty Bank, Realty, Infra, and Energy, rising to 4 percent. Public sector lenders like SBI, Canara Bank, PNB, and Central Bank lifted the index higher. Market experts suggest that the sector has fair valuations and reasonable growth prospects.

Realty stocks, especially those based out of Maharashtra, rallied in trade on November 25 and surged as much as 7 percent amid hopes of infrastructure getting back in focus after the BJP-led Mahayuti alliance's landslide victory in the state. Names like Godrej Properties, DLF, Mahindra Life, Prestige Estates, Man Infra and Raymond led gains in the sector.

Although the markets rejoiced about the win, Aishvarya Dadheech, Founder of Fident Asset Management said that underlying factors such as persistent foreign outflows, a possibly shaky Q3, and expensive valuations may worry the market in the short to medium term.

Read more: Maharashtra, UP, Rajasthan, Bihar: How ‘Super Saturday’ changes the script for BJP beyond just numbers

Individual stocks such as M&M, and Reliance Industries rallied in trade today. Shares of Reliance Industries soared as much as 3 percent after Citigroup analysts upgraded their rating for the stock to a ‘buy’. The brokerage believes the risk-reward dynamics for the stock have shifted favourably, fueled by multiple tailwinds. M&M shares rose after Jefferies and HSBC gave bullish calls on the counter, expressing optimism on market share gains in the auto and tractor business.

JSW Steel declined over 3 percent after BSE announced it would add Zomato to its benchmark index Sensex from December 23 and drop JSW Steel. BSE also said that Zomato, HAL, Ashok Leyland, PI Industries, IDFC First Bank, IRCTC, UPL, and APL Apollo Tubes will be dropped from its BSE Sensex Next 50 index.

The broader market, comprising mid-small cap indices, also mirrored robust overall trends with gains of 1.6 and 1.9 percent, respectively. Domestic brokerage Motilal Oswal suggests that recent market corrections, driven by weak earnings, foreign outflows of $14 billion since October, and geopolitical risks, have left large-cap valuations relatively attractive. Yet, midcaps and small-caps remain expensive. The broader market has rallied up to 19 percent since the beginning of the year, sharply outpacing Nifty's 9 percent growth during the same duration.

"The Nifty has shown a strong recovery after hitting a key support level on the weekly chart, suggesting a potential rise to a target of 25,262. However, after Friday's big gains, the rise might slow down or even dip slightly when it enters the range of 24,030 to 24,420. If the stock manages to stay above 23,800 during any dips, it could continue its upward journey, facing minor hurdles at 24,420 and 24,770 along the way," Anand James of Geojit Financial Services, said.

ONGC, Bharat Electronics, L&T, Shriram Finance, and BPCL were the top gainers on the Nifty. JSW Steel, Infosys, Tech Mahindra, Maruti Suzuki and Bajaj Auto were the key laggards.

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