India’s equity market made solid gains on Monday morning with the benchmark indices - BSE Sensex and NSE Nifty - opening higher by about 1.5% each. The gain is attributed to the landslide victory of the Bharatiya Janata Party (BJP)-led coalition in the Maharashtra Assembly elections and a strong rally seen in global markets.
At the start of the Monday session, Sensex stood at 80,344.78, gaining 1,227%, or 1.55%, while the Nifty 50 reached 24,277, up by 370 points, or 1.55%. The fresh rally comes after the two benchmarks had surged about 2.5% each—their highest single-day gain in nearly five months- on Friday.
BEL, Shriram Finance, ONGC, M&M, Adani Enterprises and BPCL were among the gainers on the Nifty 50 pack, while JSW Steel was the major laggard. Shares of Zomato surged by more than 5% as the food tech company is set to replace JSW Steel in the BSE Sensex, effective from December 23.
V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services said that this sharp upswing is assisted by the super NDA performance in Maharashtra.
“The political message from this election is huge and highly positive from the market perspective. A significant feature of the Friday rally was the sharp spurts in many large-caps with some stocks shooting up by more than 4%. This clearly indicates short covering, which will keep the market resilient today,” he added
He, however, added that whether the rally will continue beyond a couple of days remains to be seen since the earnings headwinds will continue to constrain the bulls. Banking and IT are on a strong wicket assisted by fair valuations and reasonable growth prospects. Watch out for capital goods, telecom and pharma stocks, he said.
Experts also believe that global geopolitical uncertainties and continuous selling by foreign institutional investors remain a concern for the market.
Meanwhile, shares of all Adani Group companies opened in green on Monday. Adani Group shares nosedived more than 23% on Thursday and the conglomerates’ combined market capitalisation of the 10 listed group stocks declined by about Rs 2.28 lakh previous session crore after chairman Gautam Adani was indicted in the United States over bribery and fraud charges.