Stock market opening bell Sensex, Nifty hit record highs after BJP’s victory in key state elections

Benchmark stock market indices opened with record gains on Monday, supported by strong macroeconomic data, favourable global cues, and the Bharatiya Janata Party’s (BJP) electoral victory in the states of Madhya Pradesh, Rajasthan and Chhattisgarh.

The S&P BSE Sensex surged 1.64 per cent to hit a fresh record high of 68,587.82 at around 9:16 am, while the Nifty 50 opened 1.65 per cent higher at 20,602.50. Broader market indices also opened on a strong note as Dalal Street investors gained confidence from the results of assembly elections declared yesterday.

Ahead of today’s market opening, Sunil Nyati, Managing Director of Swastika Investment Ltd, said the markets were likely to celebrate BJP’s 3-1 victory with “big gains”.

“The market has already started the pre-election rally for May 2024 from mid-November, and now this rally will get pace after the outcome of state elections,” he said.

“After the state election outcome and surprising strong GDP numbers, it is clear that there is no alternative to India in terms of political stability and economic growth. Now these two factors have created a canvas for a pre-election rally. There is a good chance that Nifty may hit the auspicious mark of 21,000 in December itself, while another 1000–2000 point rally can’t be ruled out in the run-up to the general election,” Nyati added.

All the major sectoral indices opened with substantial gains, with Nifty Bank, Nifty Financial Services and Nifty Oil & Gas leading from the front, each with gains of over 2 per cent.

Adani Enterprises was the top gainer on the Nifty 50, up nearly 6 per cent. Adani Ports, Coal India, ICICI Bank and NTPC were the other top gainers. On the other hand, only three companies listed on the 50-share index were trading in the red – Britannia, Maruti and HDFC Life.

Following BJP’s electoral victories in three key Hindi heartland states, Manish Chowdhury, Head of Research, StoxBox, said, “The image of the BJP as a pro-reformist and the performance of the economy on various fronts, especially during the Covid period and gloomy global economic situation, have provided market participants confidence that a dual-aided right-wing government is beneficial in the longer term.”

“As we move closer to the 2024 general elections, we believe that the decisive win by the BJP in key states has sent a strong message to investors betting on India’s rising growth potential and position the country on a stronger footing as compared to its peers,” he added.

Meanwhile, Kaushik Dani, Fund Manager, ABANS Investment Managers, said “Positive outcome for the ruling government in current state elections brings a big cheer for the Equity markets. This also acts as a precursor to 2024 general assembly elections and increases hope for continuation of regime, thereby political stability and further economic reforms.”