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Published 11:10 IST, October 8th 2024

Stock market switches gear as BJP maintains strong lead in Haryana

During the second phase of vote counting, the BJP overtook the INC in Haryana, holding a lead with 48 seats compared to the Congress’ 36.

Reported by: Business Desk
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Haryana Election | Image: Republicworld

Stock market reacts to election: Domestic stocks rebounded on Tuesday, led by financials, after suffering their worst losing streak in a year due to escalating conflict in the Middle East. This recovery coincided with the election results in Haryana and Jammu & Kashmir, where the National Conference (NC) emerged as the largest party in Jammu & Kashmir, while the Bharatiya Janata Party ( BJP ) secured a significant lead in Haryana .

During the second phase of vote counting, the BJP overtook the Indian National Congress (INC) in Haryana , holding a lead with 48 seats compared to the Congress ’ 36 seats.

By 02:33 pm, the Nifty 50 index had risen 0.92 per cent to 25,023 points, while the S&P BSE Sensex gained 0.8 per cent to reach 81,697.71. Both indexes had earlier dipped slightly during the session. Over the past six trading days, benchmark indices have experienced a consistent decline, primarily driven by Middle East tensions and foreign institutional investors selling $6 billion worth of shares. 

The Nifty 50 index has dropped 5.6 per cent since its record high on 27 September, while market volatility has reached a one-month peak. Despite this, Nomura stated in a note that they do not believe the recent downturn signals a prolonged period of underperformance for Indian equities. The firm emphasised that India’s structural growth story remains appealing, and if valuations adjust to more favourable levels, investors are likely to return to the market.

Investors are now looking ahead to the Reserve Bank of India’s policy decision on Wednesday, along with the upcoming corporate earnings season. While the central bank is widely expected to keep interest rates steady, some analysts anticipate a potential shift in policy stance.

On Tuesday, ten out of the thirteen major sectors saw gains, with financials rising by 1 per cent due to their relatively attractive valuations. The broader small- and mid-cap indices, which are more focused on domestic markets, each advanced by around 1 per cent.

Among individual stocks, Mahindra & Mahindra saw a 1.7 per cent rise after CLSA upgraded the automaker’s stock from "hold" to "outperform", citing improved scale, a better product mix, and stronger pricing power in the sports utility vehicle segment. In contrast, Tata Motors dropped 2 per cent, making it the biggest percentage loser on the Nifty 50, after its unit JLR reported a 3 per cent year-on-year decline in retail sales for the September quarter.

Construction firm Skipper surged 8 per cent after Nuvama initiated coverage with a "buy" rating, highlighting expected earnings growth driven by increased transmission and distribution capital expenditure.

(With Reuters inputs)

Updated 14:36 IST, October 8th 2024

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