5 states election: BJP's performance may encourage investors, market likely to gain on Monday

The outcome of the elections with BJP coming victorious may help Indian equity markets to gain. As per Analysts who spoke to Moneycontrol, the markets are expected to cement gains as the BJP is set to form government in three Hindi heartland states - Madhya Pradesh, Rajasthan and Chhattisgarh.

Share Market Gain

Moneycontrol quoted StoxBox's Director - Research Swapnil Shah and said that the image of BJP as a pro-reformist has provided market participants with confidence.

“If the final results of the state elections are in BJP’s favour, we expect markets to further cement gains. The image of the BJP as a pro-reformist and the performance of the economy on various fronts, especially during the COVID period and gloomy global economic situation, have provided market participants confidence that a dual-aided right-wing government is beneficial in the longer term,” Swapnil Shah told Moneycontrol.

Also Read: 5 states election: Here's how the results will affect the share markets

He further added that this victory would send a strong message to investors betting on India’s rising growth potential. The victory would also position India on a stronger footing as compared to its peers, according to Swapnil Shah.

Meanwhile the Head of Retail Research at HDFC Securities Deepak Jasani has told Moneycontrol that he expected a 1-1.5% surge in the market when it resumes trading on December 4. He further reasoned out that it is unlikely to have 3-4% gains as the election results were already factored in the previous week's gain.

“Investors might take profits after recent gains. Watching how foreign investors react to election results; if they keep buying, market momentum should stay. After the election, focus shifts to RBI, Fed actions, global tensions, and the May general election,” Jasani told Moneycontrol.

Amit Kumar Gupta, research analyst at Fintrekk told the publication, that if Nifty50 can sustain above 20,430, it can test 20,620-20,810 during the week. “Bank Nifty can also test 46,120 as immediate resistance with a 5-7 percent rally immediately if that level breaks out on the upside. Valuation comfort is less in small and mid-caps though stock-specific returns may continue,” Gupta told Moneycontrol.

Moneycontrol quoted Rajesh Palviya, Head - of Technical & Derivative Research, at Axis Securities and said that Nifty can hit 20,500 and Bank Nifty reaching 45,600-45,800 levels on Monday.