After sliding nearly 500 points in the opening deals, the domestic equity market pared all its losses and later swung into the positive territory on Tuesday, signalling investors are not too unhappy with the results and they are seeing a light of hope. The only uncertainty was the sudden resignation of RBI Governor Urjit Patel, which triggered a knee-jerk reaction in the morning.

Counting of votes in five states is underway. Congress candidates took significant lead in BJP-ruled Chhattisgarh and was inching ahead of the BJP in Rajasthan. The two parties were locked in neck-and-neck fight in Madhya Pradesh. Trends showed Telangana Rashtra Samithi (TRS) appeared set to retain power in Telangana while the ruling Congress was lagging behind the Mizo National Front (MNF) in Mizoram in state elections that were widely dubbed a "semi-final" ahead of the Lok Sabha battle next year.

Arun Kejriwal, founder at Kejriwal Research & Investment, says the trends suggest the so-called Mahagathbandhan has not taken-off at all and this is something market has liked. Had it done well, there would have been confusion for the general elections, scheduled in May 2019. "If one looks at the elections as a whole, the vote is not anti-Modi and that is why recovery has happened in the market, even taking care of Urjit Patel's resignation," Kejriwal added.

Sudip Bandyopadhyay, Group Chairman at Inditrade Capital, says given the results are in-line with the exit poll that came out on Friday and market already corrected on Monday, there was no reason for markets to see any major fall from the current levels. Had there been any deviation from the exit poll outcome, then the scenario would have been different.

Investment strategies

Arun Kejriwal says the worst is behind us and it's a good opportunity to invest in stocks. A lot of headwinds on the global front - concern that US growth is slowing down, China-US trade tensions and crude prices impact Indian stocks in a great way. However, the time is ripe to enter stock markets. One should invest in largecap stocks, heavyweights and start having a little exposure in midcap and small stocks, too. However, he cautioned that midcap and small-cap stocks are yet to recover and hence, one should be extremely careful in parking their hard-earned money in these stocks.

Bandyopadhyay advises investors to adopt stock-specific approach. FMCG and select pharma stocks are his top bets.