Following the outcome of the Maharashtra election, the market benchmark indexes, the Sensex and Nifty, may aim to gain further on Monday after rising more than 2% apiece on Friday. Exit surveys indicated that the BJP-led Maha Yuti would win over 210 of the 288 assembly seats in the closely watched Maharashtra elections, compared to about 150 seats. However, the JMM appears to be headed for a third consecutive term in power in Jharkhand, defying exit poll expectations. The alliance led by the Bharatiya Janata Party was anticipated by exit polls just to miss the majority.
According to Santosh Meena of Swastika Investment, the results of the elections in Maharashtra and Jharkhand are important catalysts, particularly in Maharashtra, where the NDA won a lopsided win. He predicted that this would further increase bullish sentiment.
According to Meena, historically, downtrends frequently terminate in panic days, and the sell-off that was sparked by Adani seems to have signalled such a shift. A short-covering rally has formed ahead of the November expiration after markets were oversold for over two months.
In line with the 61.8% retracement of its previous advance from the election-day low of 21,281 to the high of 26,277, the Nifty found good support at 23,200. With a bullish Harami candlestick formation, the index recovered its 200-DMA, suggesting a possible trend reversal. The Nifty might go towards 24,550/25,000 levels if it breaks out over the immediate resistance, which is around the 20-DMA of 24,030, according to Meena.
According to Palka Arora Chopra, Director of Master Capital Services Ltd., the stability in Maharashtra may lead to a stock market boom and increase investor confidence. “The Mahayuti alliance, led by the BJP, is set to take power in Maharashtra. Political stability should ensue from this outcome, which would boost investor optimism, particularly in the industrial, urban development, and infrastructure sectors that support BJP policies, the analyst said.
“Continuity in social welfare measures is suggested by the anticipated return to power of the JMM-led alliance in Jharkhand. Although there may not be as much market fervour as in Maharashtra, the state’s continued emphasis on mining, tribal welfare, and rural development may present investment possibilities in these sectors. But unlike in Maharashtra, political stability in Jharkhand could not immediately affect the market, Arora continued.
According to Arora, the political results, notably in Maharashtra, point to a promising future for the Indian stock market overall, particularly for industries that gain from political stability and infrastructural growth.
Global forces might continue to provide serious hazards to local stocks in the meantime. Inflationary worries have been exacerbated by growing tensions between Russia and Ukraine as well as rising crude oil prices. Record FPI outflows of Rs 1.55 lakh crore in October and November combined are the result of the rupee being weakened by a rising dollar index and higher US bond rates.
“FPI sales in India are probably going to slow down shortly. Largecap values in India have also dropped from their high points. Because FIIs have been purchasing IT equities, these companies have become more resilient. Despite FII selling, banking stocks have held up well, mostly because DIIs are purchasing them, according to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
