The bulls made a strong comeback on the Street, with the benchmark indices Nifty and Sensex surging nearly 2 percent each, propelling investor wealth by a staggering Rs 8.5 lakh crore in just one day. A confluence of factors—including the positive outcome of the Maharashtra elections, encouraging signals from Asian and US markets, and a welcome dip in foreign outflows—sparked widespread buying across the bourses.
Short Covering:
A significant feature of the Friday rally of 557 points on the Nifty was the sharp spurts in many large cap stocks with some shooting up by more than 4 percent. This clearly indicates a short covering, which will keep the market resilient today.
PSU Comeback:
The sharp rally in PSU stocks follows the BJP-led Mahayuti alliance’s triumphant victory in the Maharashtra Assembly elections. Shares of PFC, IRFC, BEL, Central Bank of India, RVNL, Bharat Dynamics, NBCC (India), GAIL, Concor Corporation of India, and SAIL, among others, surged in the range of 3-8 percent in an overall strong market.
Given the remarkable rise in the past year, PSU stocks have been at the receiving end for a host of reasons such as expensive valuations and softer-than-expected elections outcome. As early as last week, the share of public sector companies (PSUs) in India’s total stock market capitalisation declined to an 11-month low in November amid sharp corrections. In November, PSU firms accounted for 15.34 percent of India’s total market capitalisation — the lowest since December 2023
PSU Comeback: The sharp rally in PSU stocks follows the BJP-led Mahayuti alliance’s triumphant victory in the Maharashtra Assembly elections. Shares of PFC, IRFC, BEL, Central Bank of India, RVNL, Bharat Dynamics, NBCC (India), GAIL, Concor Corporation of India, and SAIL, among others, surged in the range of 3-8 percent in an overall strong market.
Given the remarkable rise in the past year, PSU stocks have been at the receiving end for a host of reasons such as expensive valuations and softer-than-expected elections outcome. As early as last week, the share of public sector companies (PSUs) in India’s total stock market capitalisation declined to an 11-month low in November amid sharp corrections. In November, PSU firms accounted for 15.34 percent of India’s total market capitalisation — the lowest since December 2023.
Capex push:
With the elections over and the BJP gaining huge support from the results in Haryana and Maharashtra, the government will shift its focus to increasing spending.
These poll results, coupled with a strong monsoon-driven recovery in rural spending and expected strong kharif output, should slightly improve the demand outlook. Corporate earnings are expected to pick up modestly in the second half of FY25, with BFSI, capital goods and real estate being their preferred sectors.
