Highlights

  • Share markets will deliver strong reactions based on election results: Experts to Mint
  • Out of the 50 Nifty stocks, 31 showed gains
  • Sensex hits its 11-week high last week

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

Last week Nifty had gained 2.39% while Sensex gained 2.29%, while in November, the Nifty small cap 100 index jumped 12% while the Nifty 50 rose 5.5%. In 2023 so far, the Nifty is up 12%, the Nifty Midcap is up 38%, and the Nifty Small Cap is up 46%.

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

Poll results: Investors will keep an hawk-eye on the election results of the five states - Madhya Pradesh, Rajasthan, Chhattisgarh, Telangana and Mizoram.

Poll results' impact

Experts who spoke to Mint has mentioned that the markets will deliver strong reactions based on the election results. Even though the state assembly polls do not impact the market behaviour it would contribute to its long term performance.

"While state elections are largely a non-event for equity markets from a long-term perspective, there might be some sharp reaction early next week," Pramod Gubbi, founder of Marcellus Investment Management told Mint.

Also Read: November manufacturing PMI rises to 56 as inflationary pressure retreat

Pravesh Gour, Senior Technical Analyst, Swastika Investmart told Mint that a stable political landscape would bolster investor confidence as the 5 states assembly polls is seen as a semi-finals to 2024 general assembly.

‘’The upcoming state polls are being considered a semi-final before the 2024 assembly elections. A stable political environment could boost investor confidence and drive the market higher. If the election outcome is not favorable, then we can expect a fall of 1-2 per cent in the market, but that will be a buying opportunity as the market will look for the general election in 2024,'' Pravesh Gour told Mint.

Meanwhile, the Mint report quoting Emkay Global Services said that a decisive BJP win will reinforce the consensus view that the party is on the front foot for the 2024 general elections. This would lead to a rally in markets as policy continuity will be viewed as a positive growth shock in the medium term.

Market performance so far

The share market opened December with a bullish note. This after buying increased due to the more than expected GDP numbers in the July-September quarter data. The domestic equity benchmark Nifty50 had hit a fresh fresh record highs logging its best week in five months. Even the midcap index ended at a record high for the 15th consecutive session. Out of the 50 Nifty stocks, 31 showed gains since the last record high on September 15, 2023.

The sensex had also hit its 11-week high, logging its fifth straight weekly gain. Nifty50 gained 2.39% while Sensex gained 2.29%. Along with the outperformance of domestically focussed small and mid caps over the blue-chips, all the 13 major sectors also logged gains last week.

In November, the Nifty small cap 100 index jumped 12% while the Nifty 50 rose 5.5%. Meanwhile, the Nifty Midcap 100 rose 10.4%. In 2023, the Nifty is up 12%, the Nifty Midcap is up 38%, and the Nifty Small Cap is up 46%.


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