Stock Market Today Highlights: BSE Sensex, Nifty50 close 3% as bulls stroll back on Dalal Street; all eyes on Modi-led NDA's next steps

Stock market today: BSE Sensex and Nifty50 staged a smart comeback in trade as bulls returned to the Dalal Street a day after the market mayhem. BSE Sensex ended the day at 74,382.24, up 2,303 points or 3.20%. Nifty50 closed the day at 22,620.35, up 736 points or 3.36%.

Stock market today: At 2:32 PM, BSE Sensex was trading at 74,161.94, up 2,083 points or 2.89%. Nifty50 was at 22,542.40, up 658 points or 3.01%.

India's government bonds are expected to remain attractive to foreign investors, despite concerns over potential policy shifts following Prime Minister Narendra Modi's narrower-than-expected victory margin in the recent elections. Although the unexpected election outcome caused a dip in stocks, bonds, and the rupee due to fears of increased populist spending and a slowdown in reforms, fund managers remain optimistic about the bond market.Kenneth Akintewe, head of Asian sovereign debt at abrdn, views the initial response of higher yields and currency weakness as "an attractive opportunity to add risk." He believes that the positive outlook for bonds remains largely unaffected by the election results, particularly given the stronger-than-expected fiscal starting point.Adarsh Sinha, co-head of Asia FX & rates strategy at Bank of America, questions the likelihood of a surge in populist spending immediately after the elections. "For the government, what would be the incentive to splurge after the election in the near term?" Sinha suggests that expectations of such spending may be misplaced. (Reuters)

Prashanth Tapse, Senior VP (Research), Mehta Equities, anticipates that the markets will continue to experience short-term volatility, despite the historic third consecutive victory of the NDA-led BJP government. Given the current circumstances, it is recommended that investors and traders exercise caution and allow the markets to find stability following the unexpected election results. Defensive sectors such as FMCG, Telecom, and Pharma, which are less influenced by government policies, may be a prudent focus for market participants, says Tapse.

The upcoming budget presentation and the release of quarterly earnings reports are expected to be significant events that could impact market trends. There is concern regarding the potential repositioning of FIIs and the resilience of DII investments in the near term. From a technical perspective, the market's upside potential appears limited in the short term, while the downside may unfold gradually. The crucial level to monitor is the 21,000 mark; a close below this psychological threshold could trigger further selling pressure, potentially pushing the market down to test the 20,200 level, he was quoted as saying by ET.

Geopolitical uncertainties and the global economic situation may require acceleration of reforms. But with a coalition govt at the Centre, it may not be easy as some issues, such as privatisation and a relook at GST, need consensus. TOI lists top areas of focus:

GST revamp: Five-slab GST rate structure may not be reviewed immediately as it may require merging the 12% and 18% slabs, necessitating an increase in levies on goods and services that move into the higher bracket. That's an issue on which political consensus may not be easy.

Public Finances: Privatisation is likely to be put on a back-burner for some time. While RBI's mega dividend of Rs 2.1L crore and robust GST revenues will keep Centre's finances in good shape, the Centre may have to go slow on cleaning up the subsidy regime further, although greater use of technology to plug leakages is something that won't change.

Investment push: After hitting a high of $85 billion in 2021-22, the annual inflow of foreign direct investments has fallen for two consecutive years, touching $71 billion in 2023-24. Govt is expected to make the investment regime more attractive in several sectors, including electric vehicles and artificial intelligence.

Food prices: Although overall inflation has moderated (see chart below), food prices remain both volatile and high. Govt may take steps to weatherproof prices and shield it from climate-induced shocks such as heatwaves and floods.

Agriculture: The latest GDP data indicates a relative stagnation in the farm sector. Reforms focusing on irrigation and use of Al to raise productivity are expected. Election results point to the challenging but imminent need to raise farmers' income.

Exports & PLI: The production-linked incentive (PLI) scheme has helped push exports of smartphones and other products but there have been demands to extend it to more sectors, such as toys and footwear. Expect fine-tuning of PLI to focus more sharply on companies and sectors willing to shift out of China for export production.

Regulatory clarity: Before the poll dates were announced, several new economic legislations were in the works. A better regulation of cryptocurrencies, Al, data protection is under consideration.

Maintaining growth: Most economists do not expect 2024-25 GDP growth to be a repeat of 8.2% growth in 2023-24. But ensuring a growth rate of even 7% in the current global economic environment won't be easy. Among the steps expected are a road map for energy transition and a push for infra investments. Economic ministries have made action plans with specific targets for 2030 and 2047. A ministry-wise action plan could be unveiled, if there is a consensus in the new govt.

Stock market today: At 11:37 AM, BSE Sensex was trading at 73,698.41, up over 1,600 points or 2.25%. Nifty50 was at 22,397.00, up 512 points or 2.34%.

Stock market today: At 11:09 AM, BSE Sensex was trading at 73,332.15, up 1,253 points or 1.74%. Nifty50 was at 22,287.75, up 403 points or 1.84%.

Shares of many public sector companies had recently become market favorites. In the past year, BHEL, Cochin Shipyard, Mazagon Dock Shipbuilders, Hindustan Aeronautics, REC, and Power Finance Corporation have delivered returns ranging from 150% to 550%. This surge has also led to higher valuations for these stocks.

Stock market today: At 10:41 AM, BSE Sensex was trading at 72,541.78, up 463 points or 0.64%. Nifty50 was at 22,040.15, up 156 points or 0.71%.

Stock market crash: The stock market experienced a significant downturn on Tuesday, with public sector enterprises (PSUs) bearing the brunt of the losses. Investors expressed concerns about the future prospects of these companies following the Bharatiya Janata Party's failure to secure a decisive majority in the general elections. The market had anticipated that a strong BJP-led government would be crucial for further gains in PSU stocks. However, the election outcome has raised doubts about the government's ability to effectively revive state-owned companies during its third term.

The BSE's PSU index suffered its worst single-day losses, plummeting by 15.7%. Several PSU stocks were hit particularly hard, with Power financier REC leading the pack with a 24% slump. Other notable losers included Power Finance Corporation, Container Corporation of India, Bharat Electronics, BHEL, and SAIL, all of which saw their stock prices drop between 18-22%. The majority of PSU stocks experienced declines exceeding 10% during the trading session. The market capitalisation of PSUs collectively lost ₹10.62 lakh crore in a single day.

Vinit Sambre, Head Equities at DSP Mutual Fund, commented on the market reaction, saying, "Over the last 18 months, the valuation gap between the PSU and their private counterparts had been narrowing as a result of massive rerating fuelled by optimism surrounding the BJP's development agenda. However, the unexpected election result has affected this narrative, leading to a swift unwinding of the positive sentiment that had been built up."

Morgan Stanley's Riddham Desai has shared his insights on the recent election verdict and its potential impact on the Indian equity markets. According to Desai, the firm's medium to long-term views remain unchanged despite the outcome of the elections.

He expects both realized and implied volatility to decrease in the coming days, suggesting a more stable market environment. However, Desai points out that the equity markets have not yet priced in the possibility of "unresolvable disagreements within the NDA coalition," which could potentially lead to some uncertainty.

Despite this, Desai believes that the pace of reforms is unlikely to slow down following the election results. He also expresses confidence that the government will continue to prioritize macro stability as the foundation of its economic policy, rather than sacrificing it for short-term gains.

According to Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, the unexpected election outcomes will require some time for the market to digest. Although stability is expected to be restored in the near future, fluctuations will persist until there is transparency regarding the cabinet and crucial portfolios. In the short term, a significant market recovery is improbable, but sector-specific preferences may shift. Industries such as FMCG, healthcare, and IT will gain increasing favor, while momentum plays will decelerate, he said.

The sharp market correction has one advantage: it has slightly reduced the excessive valuations, which will encourage institutional buying once the cabinet's formation and composition are clarified.

Investors can begin accumulating high-quality largecaps in sectors such as IT, financials, autos, and capital goods, he says.

Stock market today: After rising over 650 points, Indian markets pared initial gains on Wednesday. At 9:49 AM, BSE Sensex was trading at 72,142.00, up 63 points or 0.087%. Nifty50 was at 21,906.35, down 22 points or 0.100%.

Mahesh Nandurkar from Jefferies shares his insights on the potential outcome of the elections and its impact on various sectors. He maintains that the most likely scenario is a coalition government with Narendra Modi at the helm.

Despite the uncertainty surrounding the elections, Nandurkar remains optimistic about the housing-led capital expenditure cycle. He believes that any extreme market reactions to the election results could present a lucrative buying opportunity for investors, according to an ET report.

According to Nandurkar, large-cap stocks that have underperformed in the recent past offer the most attractive risk-reward ratio. He particularly favors private banks, consumer staples, and automotive original equipment manufacturers (OEMs). However, he has reduced his overweight stance on real estate, industrials, and public sector undertakings (PSUs).

Stock market live: Indian equity benchmark indices saw a positive start to trading on Wednesday after the market mayhem on Tuesday when Lok Sabha results showed Modi-led NDA securing lesser than predicted seats. At 9:17 AM, BSE Sensex was trading at 72,723.13, up 644 points or 0.89%. Nifty50 was at 22,070.90, up 186 points or 0.85%.

Stock Market Today Live: BSE Sensex has rise almost 950 points to 73,027.88, up 1.32% in pre-open. Nifty50 has risen 1.11% to 22,128.35.

Stock market crash: The domestic markets experienced a significant intraday decline yesterday, the largest in over four years, as the election results indicated the NDA's return to power but with a reduced majority. Today's trading session will focus on various companies, including Tata Motors, Wipro, RIL, SJVN, NTPC, and Canara Bank, due to recent developments.

SJVN anticipates its 900 MW Arun-3 hydro-electric project in Nepal, currently under construction, to commence power generation from the following year, as approximately 75% of the work has been completed.

PSU stocks will remain in the spotlight today following a significant sell-off on Monday, which was triggered by the NDA securing a lower-than-expected majority in the Lok Sabha elections.

Tata Motors' board has given the green light to establish a wholly-owned subsidiary, proposed to be named TML Commercial Vehicles Ltd (TMLCVL), to manage its commercial vehicles business.

RIL, a major constituent of the Nifty50 index, will be closely watched today after the company's investors lost around Rs 1.27 lakh crore on Tuesday.

Wipro has partnered with Zscaler to introduce "Wipro Cyber X-Ray," an AI-assisted decision support platform.

Infosys has announced a collaboration with Nihon Chouzai (TSE) to expand healthcare access in Japan by enhancing online medication guidance services.

NTPC is reportedly planning to venture into the nuclear power sector by establishing a 10 GW capacity with an investment of Rs 1.5 lakh crore over a 10-year period.

Canara Bank has reportedly initiated the process of seeking regulatory approval to convert its software services subsidiary into a non-banking finance company.

On Tuesday, U.S. stocks experienced a modest increase following the publication of weaker-than-expected labor market data. This information strengthened the notion that the Federal Reserve may soon lower interest rates. The data released on Tuesday showed that U.S. job openings in April fell to the lowest level in more than three years, suggesting a softening of labor market conditions. This development is consistent with the anticipated Fed rate cut in the near term. As a result, U.S. Treasury yields declined after the report's release.

In early Asian trading on Wednesday, oil prices continued to slide slightly from the previous session after an industry report indicated increases in U.S. crude and fuel stockpiles. This news further exacerbated concerns regarding demand growth. Brent crude futures fell 14 cents, or 0.2%, to $77.38 a barrel by 0005 GMT. U.S. West Texas Intermediate crude futures fell 18 cents, or 0.3%, to $73.07 a barrel.

Gift Nifty (formerly SGX Nifty) indicates a positive opening

Nifty futures on the Gift Nifty rose by 103 points, or 0.47%, to trade at 22,050

Investment professionals hold the view that capital expenditure, undertaken by both the government and private enterprises, plays a crucial role in driving economic growth. They emphasize the importance of private sector investment, which has been significantly lacking in recent years, and stress that it should either supplement or complement the government's capital expenditure efforts.

Given India's favorable macroeconomic fundamentals, fund managers believe that any positive developments on the global stage could provide additional support to the domestic economy. These potential tailwinds include improving macroeconomic conditions in China and interest rate reductions in the United States.

The upcoming Budget for the fiscal year 2024-2025 is expected to be a key determinant of the future trajectory of the Indian economy and financial markets. Market participants will closely monitor the budget announcements and their potential impact on various sectors and overall economic growth prospects.

Stock market crash: According to Vinit Sambre, head (equities), DSP Mutual Fund, “There is a bit of uncertainty as investors are concerned about the slowdown of reforms that had been initiated under the (outgoing) BJP-led govt. This has triggered a correction in the markets as investors reassess the outlook under the new political landscape. We would like to believe that the development agenda that spurred the performance of equity is likely to persist, irrespective of the party in power.”

Stock market live updates: Fund managers in India are hopeful that the new government will maintain the current momentum of economic reforms and policies that support the industry. They anticipate that the BJP-led alliance, despite having a reduced mandate, will persist with the initiatives and projects initiated by the previous government. This sentiment prevails even amidst the apprehension that gripped investors following the announcement of the Lok Sabha election results on Tuesday.

Furthermore, financial experts believe that the election outcome, which is seen as a setback for the ruling alliance but a significant boost for the opposition, has the potential to temper the surging bull market in India and bring valuations to a more reasonable level. Most believe that even though the BJP-led alliance now has a depleted mandate, it would continue the works and projects launched under the outgoing govt.

Stock market crash: The stock prices of all 11 Adani Group companies plummeted on Tuesday, resulting in a staggering loss of Rs 3.6 lakh crore for investors. The crash was attributed to the reduced mandate for the BJP-led NDA coalition. Since Prime Minister Modi took office in May 2014, opposition parties have claimed that the Adani Group has gained the most. Investors speculate that a weakened NDA mandate could cause the group to lose its competitive edge. Additionally, the group would face increased scrutiny from a more powerful opposition.

According to dealers, these factors contributed to the decline of Adani Group stocks in Tuesday's crashing market. BSE data revealed that the group's combined market capitalization dropped from Rs 19.4 lakh crore on Monday to Rs 15.8 lakh crore as stock prices of Adani Group companies plunged during the day.

The group's flagship company, Adani Enterprises, led the decline with a 19% crash, eroding its market cap by Rs 80,416 crore. Adani Ports, which will soon join the sensex, lost nearly Rs 72,800 crore, or a fifth of its market value, bringing its current level to Rs 2.7 lakh crore. Other group companies also suffered significant losses, with Adani Green Energy losing nearly Rs 62,000 crore and Adani Power losing about Rs 58,300 crore in market value.

India has secured the second position in the global IPO market, raising $4 billion in the current year. With the NDA expected to form the next government, the IPO boom is likely to continue throughout 2024 due to anticipated policy stability. Although the amount raised by India is 45% lower than the total collected in 2023, according to LSEG data, it surpasses China ($3 billion) and Saudi Arabia ($2.1 billion). India's IPO proceeds also exceed the combined amount raised in Turkey, Hong Kong, and South Korea. The US remains the top IPO market, having raised $14 billion so far in 2024, as per LSEG. India has climbed from the 11th position in 2019 to the third place globally in terms of IPO proceeds, following the US and China in 2023.

Between January and the present, India has witnessed 113 IPOs. Mahavir Lunawat, MD at investment bank Pantomath Capital Advisors, said, "Amidst general elections, the primary market remained vibrant with the solid response to certain IPOs like Awfis Space Solutions. Confidence can be gauged by these offerings that have been launched amidst elections... Looking ahead, the market is set to witness a flurry of IPOs, from new-age business as well as from conventional business segments."

Several prominent companies, including Hyundai Motor India, Tata Capital, Ola Electric Mobility, Swiggy, and NSDL, are planning to launch their IPOs in the near future.

According to UBS, “After a weak political outcome, we believe investors will focus on govt formation and the choice of prime ministerial candidate considering the BJP does not have a simple majority of its own.” The other focus areas would be “policy choices to support growth vis-a-vis ensuring macro stability, and the reform narrative”.
UBS analysts said they would watch out for upcoming union budget announcements, implementation of labour laws and the next set of reforms in land and capital.

“This was not an election outcome the market valuations were set up for. Indian valuations have been expensive for pretty ordinary corporate earnings growth/outlook. One of the arguments behind India’s rich valuations has been the political stability/policy certainty afforded by a strong govt. Some of those assumptions could now come under question,” the report by UBS said.

Stock market live updates: According to Pradeep Gupta, Co-founder & Vice-chairman, Anand Rathi Group, the Indian stock markets experienced significant volatility in response to the 2024 Lok Sabha election results with broader indices, Nifty 50 closing the day at -5.93%, with the lowest of the day touching -8.19%. Here are the key reactions and insights based on recent market movements and expert analyses by Anand Rathi.

•Immediate Market Reaction:

The markets saw heightened volatility due to the uncertainty surrounding the election outcomes mainly due to the gap between the exit polls and the actual results declared today. The pre-election rally witnessed yesterday, driven by expectations of a BJP victory, had already been factored into market prices. Till the question of the continuity of the current government was at an unsure position, the markets continued with heightened volatility in the short term period.
•Long-Term Outlook:

Historical data suggests that despite initial volatility, markets tend to recover and even thrive in the longer term. For instance, even after the 2014 and 2019 elections, the Indian stock market saw significant gains in the months following the election results. Investors are advised to focus on long-term strategies, such as maintaining a diversified portfolio and avoiding panic selling. Strong fundamentals and resilience against political changes are crucial for navigating market volatility.

•Sectoral Impact:

Sectors like infrastructure, defence, and capital goods are expected to benefit from policy continuity and government focus on development projects.
Large-cap stocks are preferred for their stability and resilience against economic fluctuations. In summary, while the immediate market reaction to the election results has been volatile, the overall long-term outlook remains positive, particularly if policy continuity is maintained. Investors are encouraged to stay informed, focus on fundamentals, and be prepared for short-term fluctuations.