PSU, Adani stocks lead rally ahead of LS poll results

PSU, Adani stocks lead rally ahead of LS poll results

Adani Group stocks gain up to 16%; public sector Power Grid, NTPC, SBI and ONGC are top performers on BSE and NSE indices.

NEW DELHI: Public sector undertaking (PSU) and the Adani Group stocks were in demand on Monday as investors are anticipating big returns from these two categories in the next 5 years after exit poll results predicted a third term for Prime Minister Narendra Modi and his BJP-led NDA alliance.

The demand for PSU scrips was such that four of the top six Nifty50 gainers - Power Grid, NTPC, SBI, and ONGC – were a government undertaking. The other two top gainers were Adani Ports & Special Economic Zone and Adani Enterprises Ltd.

“Adani Group stocks moved sharply higher on positive sentiment emanating from a probable victory of the ruling government in general elections. Apart from the sentimental reaction, we believe that Adani Group stocks have got their mojo back following Hindenburg allegations at the start of 2023.

The Group has consciously worked on reducing its debt levels and pledged shares, reflecting in the current cumulative market cap of Group companies crossing the highs of January 2023” said Manish Chowdhury, Head of Research at StoxBox.

Amit Goel, co-founder and chief global strategist at Pace 360 said that the Adani Group has established itself as a stand-in for the Modi government’s aspirations to build top-notch infrastructure in India, thanks to its holdings in the nation’s ports, airports, and power-producing companies.

Goel added that Modi government’s initiatives to outrun China by bolstering India’s manufacturing and infrastructure have given industrial stocks a boost.

Adani Group stocks gained up to 16% on Monday and the group’s market capitalisation at `19.42 lakh crore surpassed the pre-Hindenburg level. The stock of Adani Power zoomed 15.64% on the BSE while that of Adani Ports rallied 10.25%. Eight other listed Adani Cos gained 3.5-9.5% on Monday. In contrast, frontline indexes - NSE Nifty and BSE Sensex - gained 3.3-3.4% on Monday.

Among the PSU stocks, the Nifty PSU bank index surged 8.40% to close at 8,006 points with all its 12 constituents clocking gain. Bank of Baroda rallied 12.08% while the State Bank of India settled 9.48% higher. SBI also became the first public sector bank to have a market cap of Rs 8 lakh crore.

Nifty CPSE indices jumped 471.90 points or 7.16% to end at 7,059.80 points, with NTPC climbing 9.33%, Power Grid gaining 9.03% and Bharat Electronics (BEL) surging 8.06%.

Market movement on election result day

1999

when Atal Bihari Vajpayee formed government: Nifty rose 1.06% on the result day

2004

when UPA came to power: Nifty fell 12.24% on election result day. The next day it gained 8.3%

2009

when UPA retained power: Since the vote counting day was Saturday, Nifty rose 17.74% on Monday, the first trading session after the results. The next day it fell by 0.11%

2014

when BJP-led NDA clinched victory: Nifty ended higher by 1.12%. Next day it rallied another 0.84%

2019

when BJP-led NDA improved its seat tally: Nifty closed result day 0.69% lower but recovered 1.6% the next day

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The New Indian Express
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