Equity markets will respond positively to the BJP’s big wins in Madhya Pradesh, Rajasthan and Chhattisgarh assembly polls, as a stable political environment could further boost investors’ confidence and drive stocks higher, analysts said. Besides the state elections outcome, global trends, trading activity of foreign investors, and RBI’s interest rate decision are the other major factors that will drive the movement in the domestic equity markets this week, they added.
The BJP was set to form the government in the Hindi heartland states of Rajasthan and Chhattisgarh while retaining power in Madhya Pradesh with an emphatic win, according to counting of votes on Sunday. In Telangana, the Congress was set to form the government.
“A new bull phase with a clear support for growth awaits the market following a strong mandate for the ruling party at the Centre in 3 out of 5 state poll results. A stable political environment could further boost investors’ confidence and drive the markets higher, with the possibility of benchmark Nifty attaining 20,500-20,800 levels going ahead appears bright,” said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.
Optimistic global trends including signs of foreign investors making a comeback in domestic markets are the major factors that will drive the upward movement going forward, he said.
V K Vijayakumar, Chief Investment Strategiest, Geojit Financial Services, said on Sunday, “If the state elections can be treated as semi-final, then the indications are that the final will be an outright victory for the BJP.”
“The results have surpassed the ruling dispensation’s most optimistic expectations with a landslide win in MP and seizing power from the Congress in Rajasthan and Chhattisgarh. Clearly, it is advantage BJP. Markets like political stability and market-friendly reform-oriented government. BJP is the party that can deliver this now. Therefore, the markets will respond positively,” Vijayakumar added.
Markets are likely to celebrate with big gains, Sunil Nyati, Managing Director, Swastika Investmart Ltd, said on BJP registering big wins in Madhya Pradesh, Rajasthan and Chhattisgarh.
