Tuesday saw new record highs for India’s benchmark indices for the second straight day, as the country’s markets remained buoyant following the governing party’s victories in state elections. Meanwhile, a global stock surge abated ahead of important U.S. data.
Public sector banks added 1.3%, while banks gained 0.7%. A number of brokerages selected large-caps and financials as their top sectors because they expected domestic stocks to rise ahead of the general elections in 2024.
Results over the weekend indicated that the ruling Bharatiya Janata Party of India has won three significant states’ assembly elections.
According to VK Vijayakumar, chief investment strategist at Geojit Financial Services, “foreign portfolio investors have reversed their selling strategy and have been consistent buyers during last seven sessions.”
“The stocks of frontline banks are accumulating.” The market has potential to go up by another 5% in the near-term,” Vijayakumar added.
Axis Bank and State Bank of India both increased 1.75%, while HDFC Bank and ICICI Bank gained almost 1%.
As supply cutbacks and worries about demand kept Brent Crude futures steady at $78 per barrel, oil and gas stockpiles continued their upward trend, climbing 0.9%. A decline in the price of crude oil benefits the commodity’s importers, such as India and its oil marketing businesses. [O/R]
Bharat Petroleum Corp was one of the top Nifty 50 gainers with a 3% climb.
The small- and mid-caps, which are more focused on the domestic market, gained 0.4% and 0.6%, respectively, to reach new record highs.
The Adani Group’s stocks continued to rise for the second day, rising between 2% and 6%. The top Nifty 50 gainers were Adani Ports, Adani Enterprises, and the Special Economic Zone.
Following the recent surge, Wall Street stocks fell overnight ahead of important labour market statistics that might affect the U.S. Federal Reserve’s interest rate policy. The markets in Asia were muted.