Benchmark equity indices Sensex and Nifty showed a strong rebound in early trade on Wednesday after significant losses in the previous session. Value-buying at lower levels led to this uptrend, signalling investor confidence returning to the markets. The 30-share BSE Sensex surged 948.83 points, reaching 73,027.88 in early trade. Similarly, the NSE Nifty climbed 247.1 points, hitting 22,131.60.
Election impact on markets
Despite the NDA securing a majority in the Lok Sabha, the BJP fell short of the 272-seat majority mark, marking a first since 2014 and emphasizing reliance on allies. The Election Commission confirmed the BJP winning 240 seats and Congress securing 99 seats.
Market analysts’ perspectives
Motilal Oswal Research suggested that even with a reduced majority, the Modi 2.0 policy agenda is expected to continue, albeit with some adjustments. Populist measures may be introduced to address rural stress and boost sentiments.
Top gainers and losers
Among the 30 Sensex companies, Hindustan Unilever, Nestle, Asian Paints, HCL Technologies, HDFC Bank, Kotak Mahindra Bank, and ITC emerged as top gainers. Conversely, Larsen & Toubro, Power Grid, NTPC, and State Bank of India were among the laggards.
Market stability and volatility
Chief Investment Strategist at Geojit Financial Services, V K Vijayakumar, noted that while market stability will return, volatility may persist until there is clarity on the cabinet composition and key portfolios. He added that the sharp market correction has moderated excessive valuations, potentially facilitating institutional buying.
Global market movements
In Asia, markets in Seoul and Hong Kong were trading with gains, while Tokyo and Shanghai saw declines. US markets closed positively on Tuesday.
Commodity and investor activity
Global oil benchmark Brent crude slightly dipped by 0.04% to USD 77.49 a barrel. On Tuesday, Foreign Institutional Investors (FIIs) sold equities worth Rs 12,436.22 crore, according to exchange data.
Tuesday’s market plunge
Tuesday marked the worst trading day in four years, with the BSE Sensex plunging 4,389.73 points or 5.74%, settling at a two-month low of 72,079.05. The NSE Nifty dropped by 1,379.40 points or 5.93% to close at 21,884.50, after hitting an intraday low of 21,281.45.
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