Poll outcome, GDP growth to keep momentum going after pushing Nifty to record highs

FII's remained buyers in the local equity markets for the fourth straight session with buying around $1.2 billion

Robust GDP growth and expected political stability, as suggested by exit polls, are expected to keep the markets buoyant in the coming sessions as well after pushing the benchmark Nifty to a new high on December 1, analysts have said.

The Nifty 50 rose to 20,259.55 in the morning trade on December 1.

"The market momentum which pushed the Nifty up by 6 percent in November is likely to be sustained since the incoming data and news are positive,” VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said.

Also Read: Indian rupee rises 8 paise to 83.29 against US dollar in early trade

The exit poll results indicated a high possibility of political stability after the general elections, and the market would appreciate it, he said.

The exit polls for five states gave the BJP an edge in Madhya Pradesh and Rajasthan. The Congress is expected to retain Chhattisgarh and probably cause an upset in Telangana. In Mizoram, a hung house is a possibility.

The return of foreign investors also improved the market sentiment, with a net buying of Rs 8,148 crore worth of equities in the previous session.

“The biggest positive catalyst has been the resurgent optimism from the FII camp, which bought local shares worth over Rs 8,000 crore on Thursday amid moderating US bond yields and fading concerns of further interest rate hikes,” said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

Which sectors, stocks will gain the most?

The Q2 FY24 GDP growth rate of 7.6 percent surpassed expectations, said Vijayakumar, adding that the 13.9 percent growth in manufacturing and 13.3 percent in construction was impressive.

“Since manufacturing and construction have done well, the bulls will focus on capital goods stocks like L&T and construction-related stocks. Cement stocks may attract renewed buying interest. Autos will continue to do well,” he said.

At 10.32 am, the Nifty was trading 132 points, or 0.66 percent, higher at 20,265 and the Sensex gained 437 points, or 0.65 percent, to 67,425.

The top gainers on the Nifty were Larsen & Toubro, NTPC, IndusInd Bank, BPCL and Apollo Hospital, while the losers were Wipro, Hero Motocorp, SBI Life, Tech Mahindra and HCL Tech.

All sectoral indices except Nifty IT were trading in the green. The Bank Nifty surged 410.10 points or 0.92 percent to 44,891.85.

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 Technical Outlook

“The Nifty may take support at 20,100 followed by 20,050 and 20,000. On the higher side, 20,200 can be the immediate resistance followed by 20,300 and 20,350,” said Deven Mehata, Research Analyst at Choice Broking.

“The Bank Nifty may get support at 44,300, followed by 44,150 and 44,000. If the index advances, 44,750 would be the initial key resistance level to watch out for, followed by 44,900 and 45,100,” he added.

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