Indian stock markets may see a strong up
move this week amid results presenting a good show by the BJP in state
assembly elections, experts said.
The results of the four state elections held recently will be a major trigger for the Indian stock markets in the near-term, they added.
The BJP is set for a clear majority in Madhya Pradesh and Rajasthan, while in Delhi it is emerging as the single largest party. It is neck-and-neck with Congress in Chattisgarh.
"The state election results outcome would be positive for the stock markets in the long-run. Markets were expecting a 4-0 win for the BJP.
"Stock markets would definitely see a gap-up opening on Monday and may hit an all-time high level. Now, the next big trigger for the stock market would be the general election in 2014," said Paras Bothra, Research Head, Ashika Stock Brokers.
Enam Financial's Vallabh Bhansali said however that it is not a case that the market likes Congress or BJP government.
The market actually likes a stable government, he said, adding that the market had complaints about the existing government because economic reforms were not moving.
BJP has given a clarity about their leadership team which has helped them win over the market, Bhansali noted.
Besides, on the macro front, the industrial production data for October and Consumer Price Index (CPI) for November, key figures ahead of the RBI's December 18 policy review, would be announced on Thursday.
"Markets would open higher on Monday. Investor sentiment is at present positive. However, profit-booking may also happen at higher levels. People are at large looking for a Gujarat like model of government and growth in the country. This is the reason BJP has shown good performance in all the four states where elections held recently," said Gajendra Nagpal, CEO and Founder, Augment Financial Services.
Dipen Shah, Head - Private Client Group Research at Kotak Securities, said that in the immediate term, market movement would be determined more by the economic data in the US and the outcome of the elections.
That apart, the US unemployment rate fell to 7 per cent in November, indicating better prospects for the economy.
"Indian markets are under some pressure...as strong economic data from the US markets is reinforcing the sentiment that the Fed might start its tapering process as early as this month," said Jignesh Chaudhary, Head Of Research at Veracity Broking Services.
The benchmark S&P BSE Sensex extended gains for the second consecutive week, during which it crossed the 21,000 mark. The 30-share index surged another 205 points to end at 20,996.53, a level not seen in nearly five weeks.
"On a broader basis, at current levels one should be cautious... The short-term euphoria may also be used to book-profits in certain sectors," said Milan Bavishi, Head Research, Inventure Growth and Securities.
"Congress has been shown the door for poor political leadership and unconvincing approach to corruption," said businesswoman Kiran Mazumdar Shaw in a stern message as the poll results pouring in showed rout-like situation for the party in at least three states.
Industry chamber Assocham said: "Election results in the Assembly elections have thrown a clear message: It is the quality of governance which matters at the end of the day".
On the poll outcome, well-known industrialist Anand Mahindra said that honesty is the best politics
"AAP's dramatic debut shows we want desperately to be idealistic and not cynical. That honesty isn't just the best policy but the best politics," he tweeted.
Impressed with Aam Aadmi Party's (AAP) "amazing" debut, Shaw said, "people want corruption free politics based on transparency and responsibility".
She tweeted that AAP and Arvind Kejriwal and have walked the talk on clean politics and tasted success as a result.
Giving credit to Indian voters for voting for governance brushing aside the traditional issues of caste and religion, Assocham said political party that delivers on governance would actually remain relevant.
"Certainly, the voter may not understand the complexities of economics, but he/she reacts rather strongly if his/her purchasing power is curtailed by inflation," Assocham Secretary General D S Rawat said.
PHD Chamber of Commerce & Industry said that inflation has definitely played on voters mind, as there has been price rise in vegetables and essential commodities, leading to a paradigm shift in voters mindsets.
"As an industry body, we urge the winning parties to take steps for generating employment by boosting industrial growth. This can be done by giving tax holidays and financial reforms" the association's Executive Director Saurabh Sanyal told PTI.
On Delhi elections, CII expressed hope that new state leadership would work to promote inclusive growth.
The results of the four state elections held recently will be a major trigger for the Indian stock markets in the near-term, they added.
The BJP is set for a clear majority in Madhya Pradesh and Rajasthan, while in Delhi it is emerging as the single largest party. It is neck-and-neck with Congress in Chattisgarh.
"The state election results outcome would be positive for the stock markets in the long-run. Markets were expecting a 4-0 win for the BJP.
"Stock markets would definitely see a gap-up opening on Monday and may hit an all-time high level. Now, the next big trigger for the stock market would be the general election in 2014," said Paras Bothra, Research Head, Ashika Stock Brokers.
Enam Financial's Vallabh Bhansali said however that it is not a case that the market likes Congress or BJP government.
The market actually likes a stable government, he said, adding that the market had complaints about the existing government because economic reforms were not moving.
BJP has given a clarity about their leadership team which has helped them win over the market, Bhansali noted.
Besides, on the macro front, the industrial production data for October and Consumer Price Index (CPI) for November, key figures ahead of the RBI's December 18 policy review, would be announced on Thursday.
"Markets would open higher on Monday. Investor sentiment is at present positive. However, profit-booking may also happen at higher levels. People are at large looking for a Gujarat like model of government and growth in the country. This is the reason BJP has shown good performance in all the four states where elections held recently," said Gajendra Nagpal, CEO and Founder, Augment Financial Services.
Dipen Shah, Head - Private Client Group Research at Kotak Securities, said that in the immediate term, market movement would be determined more by the economic data in the US and the outcome of the elections.
That apart, the US unemployment rate fell to 7 per cent in November, indicating better prospects for the economy.
"Indian markets are under some pressure...as strong economic data from the US markets is reinforcing the sentiment that the Fed might start its tapering process as early as this month," said Jignesh Chaudhary, Head Of Research at Veracity Broking Services.
The benchmark S&P BSE Sensex extended gains for the second consecutive week, during which it crossed the 21,000 mark. The 30-share index surged another 205 points to end at 20,996.53, a level not seen in nearly five weeks.
"On a broader basis, at current levels one should be cautious... The short-term euphoria may also be used to book-profits in certain sectors," said Milan Bavishi, Head Research, Inventure Growth and Securities.
MARKETS WELCOME POLL VERDICT
Indian Inc today said the outcome of elections in the four states should be seen as a strong message to the government as well as political parties for ensuring corruption-free rule and good governance."Congress has been shown the door for poor political leadership and unconvincing approach to corruption," said businesswoman Kiran Mazumdar Shaw in a stern message as the poll results pouring in showed rout-like situation for the party in at least three states.
Industry chamber Assocham said: "Election results in the Assembly elections have thrown a clear message: It is the quality of governance which matters at the end of the day".
On the poll outcome, well-known industrialist Anand Mahindra said that honesty is the best politics
"AAP's dramatic debut shows we want desperately to be idealistic and not cynical. That honesty isn't just the best policy but the best politics," he tweeted.
Impressed with Aam Aadmi Party's (AAP) "amazing" debut, Shaw said, "people want corruption free politics based on transparency and responsibility".
She tweeted that AAP and Arvind Kejriwal and have walked the talk on clean politics and tasted success as a result.
Giving credit to Indian voters for voting for governance brushing aside the traditional issues of caste and religion, Assocham said political party that delivers on governance would actually remain relevant.
"Certainly, the voter may not understand the complexities of economics, but he/she reacts rather strongly if his/her purchasing power is curtailed by inflation," Assocham Secretary General D S Rawat said.
PHD Chamber of Commerce & Industry said that inflation has definitely played on voters mind, as there has been price rise in vegetables and essential commodities, leading to a paradigm shift in voters mindsets.
"As an industry body, we urge the winning parties to take steps for generating employment by boosting industrial growth. This can be done by giving tax holidays and financial reforms" the association's Executive Director Saurabh Sanyal told PTI.
On Delhi elections, CII expressed hope that new state leadership would work to promote inclusive growth.
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