BJP's electoral triumph in 3 states propels markets to record highs, investors gain over Rs 4.97 lakh crore
By Sunita Iyer | First Published Dec 4, 2023, 12:56 PM ISTThe decisive majority secured by the BJP in the state elections of Madhya Pradesh, Rajasthan, and Chhattisgarh bolstered positive investor sentiment. Additionally, robust macroeconomic indicators and continuous foreign fund inflows provided further momentum to the upward trend in domestic markets.
On Monday, investors witnessed a wealth surge of over Rs 4.97 lakh crore as equity benchmark indices soared over 1 percent, reaching record highs following the BJP's victory in three key Hindi heartland states. The decisive majority secured by the BJP in the state elections of Madhya Pradesh, Rajasthan, and Chhattisgarh bolstered positive investor sentiment. Additionally, robust macroeconomic indicators and continuous foreign fund inflows provided further momentum to the upward trend in domestic markets.
In early trade, the 30-share BSE Sensex surged 877.43 points, or 1.30%, reaching a new peak at 68,358.62.
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Following the market rally, the market capitalization of BSE-listed firms surged by Rs 4.97 lakh crore, rising from Rs 337.67 lakh crore on Friday to Rs 342.64 lakh crore.
Within the Sensex firms, Adani Enterprises and Adani Ports emerged as leaders, posting gains of 6.79% and 4.52%, respectively. Other notable gainers included SBI, ICICI Bank, Bharti Airtel, NTPC, and Larsen & Toubro.
Over five trading sessions, investors witnessed a wealth increase of Rs 13.92 lakh crore.
In the broader market, the BSE midcap gauge saw a rise of 1.03 percent, while the smallcap index climbed by 1.09 percent.
On Wednesday, the aggregate market capitalization of listed companies on the BSE achieved a historic milestone, reaching USD 4 trillion for the first time ever.
Simultaneously, on Friday, the market capitalization of companies listed on the NSE surpassed the USD 4 trillion (equivalent to Rs 334.72 trillion), marking a significant milestone.
"The BJP's resounding victory in three of the four major state elections will further strengthen the market's bullish sentiment. The BJP significantly outperformed pre-poll and exit-poll expectations, which will further strengthen the prospects of the BJP retaining its majority in the Lok Sabha and the market's conviction of the BJP winning the 2024 general elections. We expect election-linked market volatility to remain low, which may result in the market trading at rich valuations in the near term," Kotak Institutional Equities said in a research note.
Analysts anticipate that domestic equity markets will be influenced by global trends, the trading activities of foreign investors, and the upcoming interest rate decision by the Reserve Bank of India (RBI) later this week.
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