Sensex, Nifty reach new peaks as BJP wins 3 states
The BJP's triumph in Rajasthan, Madhya Pradesh, and Chhattisgarh, seen as a precursor to the 2024 general elections, has fueled hope on Dalal Street. During early trade, the Sensex surged to a record high of 68,587.82, marking a 1.63% increase from the previous close. Similarly, the Nifty50 reached an all-time peak of 20,602.50, reflecting a 1.65% rise from the previous close during early trade.
BJP's triumph fuels Modi's 2024 prospects
BJP's strong wins in three of the four crucial states that recently voted for new governments, eased worries about increased fiscal populism and political uncertainty, sparking momentum in the markets. Meanwhile, Congress won in Telangana and votes are being counted for Mizoram. BJP's triumph surpassed exit poll forecasts, strengthening the belief that Modi is poised for victory in the 2024 general elections.
'Market likes political stability'
Sunil Nyati, Managing Director of Swastika Investment Ltd, emphasized, "After the state election outcome and surprisingly strong GDP numbers, it is clear that there is no alternative to India in terms of political stability and economic growth." "Market likes political stability and a reform-oriented, market-friendly government," VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services noted.
Top gainers and losers
At the start of trading, all major sectoral indices saw substantial gains. Nifty Bank, Nifty Financial Services, and Nifty Oil & Gas led the charge with gains exceeding 2% each. Adani Enterprises emerged as the top gainer on the Nifty50, marking a nearly 6% jump. Conversely, only three companies listed on the 50-share index—Britannia, Maruti, and HDFC Life—were trading in the red.
Strong Q2 GDP figures
Indian equity market is also reacting positively following better-than-expected Q2 Gross Domestic Product (GDP) figures. India's GDP grew by 7.6% in the July-September quarter, according to the government data released last week. It was 5.4% in the corresponding quarter of the previous year. It is way higher than what the Reserve Bank of India (RBI) expected, which was 6.5%.
Positive global cues
The drop in the US 10-year bond yield from its highs above 5% to 4.23% is also contributing to positive investor sentiment. Moreover, increased anticipation of a US rate cut in March is further boosting investor confidence. Many now expect the US Federal Reserve to maintain current interest rates during the upcoming meeting and potentially begin rate reductions next year.
Impressive rally since October
About 2,268 stocks gained, 457 fell and 129 were unchanged at the opening trade of the market today. Since reaching its October lows, the Nifty50 index has surged by almost 9.4%, while the Sensex has gained 8.7%.
