Sensex, Nifty Hit Record High Following BJP’s Win in 3 States

Monday saw new all-time highs for Indian equities, led by energy and banking companies as state election outcomes increased market vigor following upbeat macroeconomic data and a reduction in expectations for global interest rates.

For the second straight day, the NSE Nifty 50 index reached a record high of 20,602.50 points, up 1.65%. As of 9:51 a.m. IST, the S&P BSE Sensex was up 1.64% to an all-time high of 68,587.82.

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Sector gains were led by gains in energy equities (up 2%), and financial services (up 1.8%).

Heavyweights on the index, Reliance Industries, ICICI Bank, and HDFC Bank, all saw gains of 1% to 3%.

Both small- and mid-cap stocks saw gains of roughly 1%, setting new all-time highs.

Results from the weekend indicated that the ruling Bhartiya Janata Party (BJP) had achieved significant wins in three of the four state legislature elections.

Researchers Anjali Verma and Ravi Kumar of Phillip Capital stated in a note that “the state election outcome will lead to greater confidence on continuity of BJP government at the center which will drive markets higher.” Due in part to robust domestic macroeconomic statistics, such as quarterly growth and monthly manufacturing activity, the Nifty reached a new high on Friday.

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According to Sunil Nyati, managing director of Swatika Investmart, “the market has already started the pre-election rally for May 2024 from November; now this rally will get pace after the outcome of state elections.”

November was the strongest month for the Nifty and Sensex in 2023 thanks to the recovery of foreign funds and a stronger outlook for global interest rates.

Stocks in the Adani Group increased by 3% to 9%, outpacing increases in a number of sectoral indexes, such as the oil and metals sectors.