BJP win: Nifty seen at new peak on Tuesday
MUMBAI: Dalal Street investors are expected to go on a buying spree on Tuesday after Prime Minister Narendra Modi-led BJP's strong showing in state elections reflected a popular support for the central government's policies. Massive wins for BJP is also prompting investors to bet on a comeback for the BJP-led government in 2019 Lok Sabha elections and continuation of its policies aimed at economic reforms, brokers and fund managers said.
A minor hitch, however, is that the BJP-led coalition is unlikely to get a full majority in the 245-seat Rajya Sabha till mid-2019, which at times become crucial for passage of bills in Parliament, analysts pointed out. Soon after BJP won the UP state election with a massive margin on Saturday , the grey market premium for the nifty index in Bhuj in Gujarat -the most popular place for these unofficial trades -shot up to 200 points. By Sunday evening, it had cooled down a bit to about 175. This translates to an expected Nifty opening of above the 9,100 points on Tuesday compared to its all-time peak of 9,111 recorded about two years ago. A 200point rally in nifty also translates to a Sensex gain of about 700 points. Thus the expected Sensex opening is around 29,700 points, while its all-time peak was at 30,025, which was recorded in early March 2015.
Market players are euphoric as they can now expect a stable government at the centre for the next seven years, which will push ahead with its economic reforms programme. “Markets are enthused by this BJP win and are now looking forward to further push to economic reforms like rollout of GST, faster infrastructure development and job creation,“ said Nilesh Shah, MD, Kotak Mutual Fund. “Markets will also start discounting that post 2019, BJP will have a majority in Rajya Sabha, facilitating even faster liberalization,“ Shah, who manages over Rs 1 lakh crore of investor money, said.
Market players are expecting some correction to set in later in the week. “As markets open on Tuesday , of all probability a new high will be reached as the euphoria will continue for two-to-three days and then profit-taking will set in,“ said Arun Kejriwal, director, KRIS, an investment advisory firm. “Large short covering (by speculators) will also help keep the market buoyant du ring the shortened trading week,“ he said. Stocks from sectors like PSU, two and four wheelers, and power are expected to lead the rally , market players said.
A report by domestic broking major Motilal Oswal pointed out that despite the landslide win in UP , NDA (the BJP-led alliance), is unlikely to gain a Rajya Sabha majority before fiscal 2020. The NDA currently holds 73 seats and the current state poll wins will give it advantage of just nine seats, including one seat from Goa, it noted. This will take NDA 's Rajya Sabha tally to 82 by the end of 2018, it said.
A minor hitch, however, is that the BJP-led coalition is unlikely to get a full majority in the 245-seat Rajya Sabha till mid-2019, which at times become crucial for passage of bills in Parliament, analysts pointed out. Soon after BJP won the UP state election with a massive margin on Saturday , the grey market premium for the nifty index in Bhuj in Gujarat -the most popular place for these unofficial trades -shot up to 200 points. By Sunday evening, it had cooled down a bit to about 175. This translates to an expected Nifty opening of above the 9,100 points on Tuesday compared to its all-time peak of 9,111 recorded about two years ago. A 200point rally in nifty also translates to a Sensex gain of about 700 points. Thus the expected Sensex opening is around 29,700 points, while its all-time peak was at 30,025, which was recorded in early March 2015.
Market players are euphoric as they can now expect a stable government at the centre for the next seven years, which will push ahead with its economic reforms programme. “Markets are enthused by this BJP win and are now looking forward to further push to economic reforms like rollout of GST, faster infrastructure development and job creation,“ said Nilesh Shah, MD, Kotak Mutual Fund. “Markets will also start discounting that post 2019, BJP will have a majority in Rajya Sabha, facilitating even faster liberalization,“ Shah, who manages over Rs 1 lakh crore of investor money, said.
Market players are expecting some correction to set in later in the week. “As markets open on Tuesday , of all probability a new high will be reached as the euphoria will continue for two-to-three days and then profit-taking will set in,“ said Arun Kejriwal, director, KRIS, an investment advisory firm. “Large short covering (by speculators) will also help keep the market buoyant du ring the shortened trading week,“ he said. Stocks from sectors like PSU, two and four wheelers, and power are expected to lead the rally , market players said.
A report by domestic broking major Motilal Oswal pointed out that despite the landslide win in UP , NDA (the BJP-led alliance), is unlikely to gain a Rajya Sabha majority before fiscal 2020. The NDA currently holds 73 seats and the current state poll wins will give it advantage of just nine seats, including one seat from Goa, it noted. This will take NDA 's Rajya Sabha tally to 82 by the end of 2018, it said.
