Stock Market Soars: Sensex Gains 1,200 Points, Nifty Rises by 1.7% Due to BJP’s Maharashtra Win and Other Factors
The Indian stock market experienced a significant rally on November 25, with the Sensex and Nifty showing impressive gains. All 13 major sectors posted positive returns, with the PSU Bank index leading the way by rising 4.5%. Broader market indices, such as small-cap and mid-cap stocks, also saw an increase of around 2% each.
The BSE Sensex surged by 1,289.89 points to close at 80,407, while the NSE Nifty climbed 405.25 points, reaching 24,312.50. Key contributors to this rally included companies like Mahindra & Mahindra, Larsen & Toubro, State Bank of India, Reliance Industries, ICICI Bank, and Bajaj Finance. Here’s a closer look at the factors behind this market surge:
1. BJP’s Win in Maharashtra Elections
The National Democratic Alliance (NDA), led by the Bharatiya Janata Party (BJP), won 233 of 288 seats in the Maharashtra assembly elections. Maharashtra, home to Mumbai, India’s financial capital, is a key state for economic activity. This victory led to renewed investor confidence, as the market expects policy stability and government-driven developmental initiatives.
The election results triggered widespread buying across sectors, partly due to short covering. Many stocks, particularly large-cap companies, saw sharp gains, with some rising over 4%. Experts like Vikas Khemani, Founder of Carnelian Asset Management, and Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that short covering played a major role in sustaining market strength.
2. MSCI Index Changes
The scheduled reshuffle of the Morgan Stanley Capital International (MSCI) indices also fueled optimism. The MSCI Standard/EM Index for India is set to add five new stocks, bringing the total to 156. Additionally, 13 stocks will be added to the Smallcap Index, increasing the total to 525. These adjustments reflect evolving market trends and enhance India’s representation in global indices.
Market sentiment was further supported by expectations of continued positivity following the BJP’s victory and global market rallies, according to Vikas Jain, Head of Research at Reliance Securities.
3. PSU Stocks Rally
Public sector undertakings (PSUs) saw significant gains, with some stocks rising by up to 8%. Companies like Indian Railway Finance Corporation (IRFC), Bharat Electronics Ltd (BEL), Rail Vikas Nigam Ltd (RVNL), and GAIL were among the top performers. Analysts linked this surge to hopes for increased government spending on infrastructure and policy continuity.
4. Global and Regional Market Trends
While Indian markets rallied, there were mixed signals from global markets. Asian markets like Seoul and Tokyo traded higher, but Shanghai and Hong Kong were in the red. In the U.S., markets closed on a positive note on Friday. Additionally, crude oil prices slightly dipped, which supported domestic markets. However, foreign institutional investors (FIIs) sold equities worth ₹1,278.37 crore on Friday, adding some caution to the overall optimism.
In summary, the market rally on November 25 was driven by a combination of political stability, MSCI index adjustments, a surge in PSU stocks, and favorable global cues. Investors remain optimistic about future growth and policy reforms under the BJP-led government in Maharashtra.
MSCI November Update: Indian Stocks to Attract $2.5 Billion, Focus on HDFC Bank
The quarterly update of the Morgan Stanley Capital International (MSCI) indices is set to take place on November 25, and it is expected to bring significant changes for Indian stocks. Experts predict that Indian equities will see a net inflow of around $2.5 billion through Foreign Institutional Investor (FII) passive flows. One of the highlights of this update is HDFC Bank, as its weightage in the MSCI index is set to increase, drawing major attention.
Key Changes in MSCI Indices
- Standard/EM Index Updates:
The MSCI Standard/EM Index for India will add five new stocks without any exclusions. This brings the total number of Indian stocks in this index to 156. - Smallcap Index Additions:
Thirteen new stocks will be included in the MSCI India Smallcap Index, increasing India’s total representation in this category to 525 stocks.
India’s Growing Representation
India’s weight in the MSCI Emerging Markets (EM) Index will rise from 19.3% to nearly 19.8%, the highest gain among all EM Index countries during this update. This milestone strengthens India’s presence in the index, second only to China, which holds a 27% weight with 598 stocks.
New Additions to MSCI Global Standard Index
The new stocks added to the MSCI Global Standard Index include:
- Voltas: Anticipated to draw inflows of more than $300 million.
- BSE (Bombay Stock Exchange): Likely to draw inflows of nearly $260 million.
- Kalyan Jewellers, Oberoi Realty, and Alkem Laboratories: Projected to see inflows of $241 million, $215 million, and $201 million, respectively.
Shares of these companies traded higher, gaining between 2% and 5% ahead of the index rebalancing.
HDFC Bank in Focus
HDFC Bank is expected to gain the most attention as its increased weight in the index could attract inflows of approximately $1.88 billion. This adjustment was initially announced during MSCI’s August update and is being implemented in two stages rather than as a one-time change.
Smallcap Additions
The 13 new stocks in the MSCI India Smallcap Index include notable names such as Eureka Forbes, Signature Global, Aadhaar Housing Finance, Indegene, PC Jewellers, and DCM Shriram. These additions are estimated to draw inflows ranging from $3 million to $7 million each, amounting to a total inflow of around $71 million for this segment.
Adani Group Developments
MSCI did not include Adani Energy in its list, citing concerns over the stock’s free float. Additionally, the free float values for Adani Green Energy and Adani Power have been revised downward.
Market Impact
Ahead of the rebalancing, stocks expected to benefit from the rejig showed gains, reflecting investor optimism. This quarterly update highlights India’s growing importance in global financial indices and reinforces confidence in the country’s market potential.
PSU Stocks Surge After BJP-Led Alliance’s Big Win in Maharashtra Elections
On November 25, Public Sector Undertaking (PSU) stocks saw significant gains on Dalal Street following the BJP-led Mahayuti alliance’s sweeping victory in the Maharashtra Assembly elections. Shares of companies like PFC, IRFC, BEL, Central Bank of India, RVNL, Bharat Dynamics, NBCC (India), GAIL, Concor Corporation of India, and SAIL rose by 3% to 8% in a strong market environment.
Key Factors Behind the Rally
- Massive Election Win:
The BJP-led alliance won over 200 out of 288 seats in Maharashtra, marking a historic performance. This is the best result by any party or alliance in Maharashtra since 1990. The victory boosted investor confidence, especially in sectors like banking, energy, and infrastructure, which are likely to benefit from increased government focus on development. - Unprecedented Performance:
- The alliance achieved around 50% of the total vote share, creating a significant 15% gap over the opposition’s 35% vote share.
- It secured 70%-87% of seats across six regions in Maharashtra, with a remarkable 91% success rate for the BJP. Even in Mumbai, the alliance captured 64% of seats.
- For the first time in six decades, the opposition failed to win even 10% of the seats, which is required to appoint a Leader of Opposition in the assembly.
Focus on Development and Spending
With the elections concluded, analysts expect the government to shift its focus towards infrastructure development and increased spending. This includes improving rural demand, driven by a good monsoon and an expected strong Kharif harvest, which should further boost economic growth.
Positive Outlook for Key Sectors
Analysts at Motilal Oswal believe the election results, combined with a recovery in rural demand, will support the overall market sentiment. They predict a modest recovery in corporate earnings during the second half of FY25. Their top sector picks include:
- Banking and Financial Services (BFSI): Likely to benefit from policy stability and economic growth.
- Capital Goods: Expected to gain from infrastructure projects and government investments.
- Real Estate: Anticipated to see improved demand as spending increases.
This strong election mandate, coupled with promising economic indicators, has reinforced market confidence, particularly in PSU stocks, which are positioned to play a key role in India’s growth story.
for more click here