Is Political Stability Driving The Indian Stock Market? Sensex And Nifty Surge After Naidu’s NDA Commitment

The Indian stock market witnessed a significant surge today, following an initially lukewarm opening. Strong support from bullish investors emerged after TDP leader N Chandrababu Naidu reaffirmed his party’s commitment to the National Democratic Alliance (NDA) post-Lok Sabha election results.

Market Rally Driven by Political Clarity

Naidu’s statement, “TDP is firmly with the NDA,” came as a relief to investors. His affirmation dispelled widespread rumors that had caused uncertainty in the Indian stock market after the BJP failed to secure an absolute majority, falling short by around 20 seats. This clarity led to a robust recovery in the markets, with investors engaging in bottom fishing at lower levels.

Indices at New Highs

The Nifty 50 index reached an intraday high of 22,445, marking a rise of over 2%. Meanwhile, the BSE Sensex climbed to an intraday peak of 73,851, a 1.90% increase from its previous close of 72,079. The Bank Nifty index also surged, touching 48,000 shortly after Naidu’s declaration.

Expert Insights

Avinash Gorakshkar, Head of Research at Profitmart Securities, highlighted the impact of political uncertainty on market performance. “The Lok Sabha Election results were below market estimates, which had anticipated a strong BJP-led government for a third term. The absence of an absolute majority raised doubts among investors, which were alleviated by Naidu’s statement.”

Despite the positive market response, experts advised caution. Sumeet Bagadia, Executive Director at Choice Broking, emphasized that the breach of the 22,100 to 22,200 mark by the Nifty 50 should not be viewed as a definitive trend reversal. “We need to wait for some more time, as the market may become bullish once the 50-stock index breaches its crucial hurdle of 22,500 on a closing basis,” he noted.

Naidu’s Commitment to NDA

Addressing the media after the BJP-led NDA secured a historic third consecutive term, Naidu reiterated his support for the alliance. “Andhra Pradesh voters have given a verdict for a better Andhra, and both TDP and BJP will work together to meet their expectations,” he stated.

Today’s market rally underscores the influence of political stability on investor confidence. While the positive momentum is encouraging, market analysts urge traders to proceed with caution and monitor key resistance levels for a clearer trend indication.