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The domestic equity market extended its winning streak for the fifth consecutive session on Monday. The momentum was fueled by the Bharatiya Janata Party’s (BJP) impressive victory in three out of five state elections, instilling investors with optimism about the party’s potential retention of a majority for a third consecutive term.
Foreign investor inflows, a decline in US bond yields, robust GDP growth, and the anticipation of no further rate hikes also contributed to the positive market sentiment.
The benchmark Nifty soared by 334.6 points, reaching a historic high of 20,602.50, while the Sensex experienced a surge of 1,106.6 points, setting a new record at 68,587.82. Notably, while Nifty had already reclaimed a new high on December 1, the Sensex reached its peak today for the first time since September 15.
In just two sessions of December, the Indian markets witnessed a notable rise of over 2 percent. The midcap and smallcap indices also achieved fresh record highs during the session, with the Nifty Midcap 100 index reaching 44,148.90 (a 1.7 percent increase) and the Nifty Smallcap 100 index scaling a new peak of 14,514.90 (a 2 percent increase).
The BJP’s decisive victory in three states—Madhya Pradesh, Rajasthan, and Chhattisgarh—defying exit polls, has significantly contributed to the positive market sentiment. The party retained Madhya Pradesh with a robust two-thirds majority and reclaimed Rajasthan and Chhattisgarh from the Congress with comfortable majorities. In Telangana, the Congress secured victory over the BRS by a narrow margin.
Market experts view the election results as a pivotal event, fostering renewed optimism and potentially triggering a sustained rally. The global backdrop, characterized by a decline in the US 10-year bond yield to 4.23%, further supports a positive outlook for an across-the-board rally in stocks.
These election outcomes, with the four states collectively accounting for 75 Lok Sabha seats out of 544, underscore the BJP’s clear mandate, providing a significant boost to market confidence.
