BJP’s Triple Sunday Impact: The market capitalisation of listed companies hit a record high of $4.10 trillion
The market zoomed to new highs with equity benchmarks surging more than 2 percent on December 4, as investors cheered the BJP’s win in three state elections, with financial services and energy names leading the rally.
At close, the Sensex was up 1,383.93 points, or 2.05 percent, at 68,865.12. The Nifty gained 418.9 points, or 2.07 percent, to end at 20,686.80, closing at a new high for the second successive session.
The Sensex, which was 400 points shy of a new peak, caught up with the Nifty to go past its previous high of 67,927.23, as the two indices clocked their biggest single-day gains since October 4, 2022.
“The market has already started the pre-election rally for May 2024 from mid-November, and now this rally will get pace after the outcome of state elections,” said Sunil Nyati, Managing Director of Swastika Investmart.
The BJP’s victory in Madhya Pradesh, Rajasthan and Chhattisgarh, votes for which were counted on December 3, signalled political stability and allayed concerns about fiscal populism, analysts said.
The market capitalization of the BSE listed companies increased by Rs 5.77 lakh crore to Rs 343.45 lakh crore.
“Now, two factors will play out — FOMO and TINA. The feeling of missing out (FOMO) and the fact that there is no alternative (TINA). FIIs are still on the sidelines, and now they have FOMO feelings,” Nyati said.
The election outcome and surprisingly strong GDP numbers show there is no alternative to India in terms of political stability and economic growth. These two factors have prepped the canvas for a pre-election rally, he said.
“There is a good chance that Nifty may hit the auspicious mark of 21,000 in December itself, while another 1,000–2,000-point rally can’t be ruled out in the run-up to the general election,” he added.
Also Read: BJP sweep powers Nifty, Sensex to new highs; 4 factors fuelling the rally
Stocks and Sectors
Eicher Motors, Adani Enterprises, Adani Ports, BPCL and ICICI Bank were among the biggest gainers on the Nifty, while losers included HDFC Life, Britannia Industries, Wipro, Sun Pharma and Titan Company.
Except Nifty pharma and media, all sectoral indices ended in the green.
Nifty Bank also touched a new high of 46,484.45 before closing with a gain of 3.6 percent at 46,431.40.
Among broader indices, BSE midcap and smallcap rose a percent each to test record highs.
A long build-up was seen in HPCL, Adani Ports and Eicher Motors, while a short build-up was seen in Zee Entertainment Enterprises, Lupin and Glenmark Pharma.
Among individual stocks, a volume spike of more than 200 percent was seen in Ambuja Cements, Shriram Finance and IRCTC.
More than 420 stocks touched their 52-week high on the BSE. These include GSFC, Inox Wind, Adani Power, NLC India, Bajaj Holdings, IFCI, Astra Microwave, Prestige Estate and Cyient. Click here for the full list
Outlook for December 5
Prashanth Tapse, Senior VP (Research), Mehta Equities
The rally was on expected lines, the ruling party’s election performance gave confidence to investors that culminated into a massive upsurge with key benchmarks scaling record highs.
India’s strong growth prospects along with moderating inflation and return of foreign investors augurs well for domestic markets in the run-up to the Union Budget in February.
Despite overbought technical conditions, the good news is that the short-term technical outlook for the Nifty continues to favour bulls, with support placed at 20,529-20,321 and resistance at 20,750-21,051.
Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas
The Nifty opened gap up and a fresh round of buying helped the index close around the day’s high.
On the daily charts, the Nifty, after breaking and closing above the previous swing high of 20,222, saw follow-through buying interest.
It managed to hold on to the gains and also build on them, which indicates that there is more steam left in the rally.
On the upside, the Nifty can move to 21,500. Daily momentum indicator has a positive crossover. A dip or consolidation towards the support zone of 20,550–20,500 should be used as a buying opportunity.
Bank Nifty was the leader of the upmove, gaining 3.5 percent. It closed at an all-time high and we expect the momentum to continue.
On the upside, 47,000- 47,200 would be the immediate short-term target and a dip towards 46,200-46,000 should be used as a buying opportunity.
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