Sensex and Nifty 50 trade higher on Monday due to victory of BJP-led Mahayuti alliance in Maharashtra; Know other reasons behind the rally
Benchmark Indian equity indices, the BSE Sensex and the Nifty 50, were trading higher on Monday, buoyed by the victory of the BJP-led Mahayuti alliance in the Maharashtra elections. Broad-based buying was seen across all sectors.
At 9:31 am, the BSE Sensex was trading up 1,305 points or 1.65 percent at 80,423, while the Nifty 50 was trading up 413 points or 1.73 percent at 24,321. All listed companies on BSE have a market capitalization of Rs. 8.66 lakh crore increased to Rs. 441.37 lakh crore has been reached.
After the recent correction, both indices have gained around 4 percent in the last two trading sessions. The BJP-led NDA won 233 out of 288 seats in Maharashtra, while the opposition coalition won in Jharkhand.
Only two of the 30 stocks in the BSE Sensex index — JSW Steel (down 1.22 percent) and Infosys (down 0.33 percent) — were trading lower. On the other hand, major gainers included L&T (up 3.18 percent), Mahindra & Mahindra, Adani Ports & SEZ, SBI and Reliance Industries.
Similarly, on the Nifty 50, 49 of the 50 constituent stocks were in the green. JSW Steel was the only laggard affected by its exclusion from the BSE Sensex index. Leading the gainers were Shriram Finance (up 4.51 percent), Mahindra & Mahindra, Adani Enterprises, BEL and NTPC.
All the sectoral indices were also in positive territory, with the PSU Bank index registering the biggest gain of 3.17 per cent. The OMC, Realty and Nifty bank indices followed, each up more than 2 percent.
In the broader markets, the Nifty Smallcap 100 gained 1.83c, and the Nifty Midcap 100 rose 1.79 percent.
Key drivers behind today’s market rally:
BJP-led Mahayuti Alliance’s Maharashtra Win:
Indian equity markets reacted positively to the landslide victory of the BJP-led Mahayuti coalition in Maharashtra, ending years of political uncertainty in one of the country’s most industrialized states. The BJP-led NDA has won 233 out of 288 seats.
Kranti Bathini, director of equity strategy at WealthMills Securities, noted that the Maharashtra election results have lifted market sentiment, aided by ease of FII selling and strong liquidity. He highlighted the importance of monitoring foreign outflows, which are likely to be reduced by the influx of FIIs in the December holiday period. “If FIIs turn to net buyers, we can see a strong recovery,” he added.
FII Outflow:
On Friday, foreign institutional investors (FIIs) in the cash markets poured Rs. 1,278 crore, marking the lowest outflow since the beginning of the month and the previous day’s Rs. 5,000 crore is significantly less than sales. The shift contributed to a market rally of more than 2 percent, marking its biggest single-day gain in five months.
Adani shares surge:
Shares of Adani Group, which lost more than $28 billion in market value in the last two sessions, saw a strong rebound with up to 7 percent. Adani Energy Solutions was the biggest gainer at 6 percent to Rs. 688, while Adani Enterprises, Adani Green Energy and Adani Total Gas gained 3-4 per cent. Adani’s other stocks such as Adani Wilmar, Adani Ports, ACC and Ambuja Cement also rose.
MSCI November Reg:
The inclusion of BSE, Voltas, Alkem Laboratories, Kalyan Jewelers and Oberoi Realty in the MSCI Global Standard Index as part of the recent rejig further boosted the positive sentiment. These changes are effective from today.
According to Nuwama Alternative and Quantitative Research, India is expected to see a net FII inflow of around $2.5 billion due to MSCI rebalancing.
Rally in Heavyweights:
Heavyweight stocks contributed significantly to the Sensex’s 1,200-point gain. Reliance Industries, HDFC Bank, ICICI Bank, L&T and SBI collectively added over 700 points in the overall rally, with these stocks rising between 2 percent and 3.5 percent. Further, the Nifty PSU Bank Index rose over 4.5 percent on gains from Central Bank of India, PNB, UCO Bank and Bank of Baroda.