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PremiumMarket Close Highlights : Indian shares jumped 3% on Wednesday in a broad-based recovery after two key allies pledged their support to form a new government following a narrow win for Prime Minister Narendra Modi's alliance.
The NSE Nifty 50 index was up 3% at 22,542 points as of 02:35 p.m. IST, and the S&P BSE Sensex was up 2.9% at 74,147. The indexes fell 0.42 and 0.26% earlier in the session.
Modi is expected to be sworn-in for a record-equalling third term on June 8, after the Telugu Desam Party and Janata Dal (United) pledged their continued support a day after a humbling election verdict that saw his Bharatiya Janata Party lose its majority in parliament.
The benchmark indexes closed nearly 6% lower on Tuesday.
"The support pledged by the allies has given confidence to the market as there were uncertainties around this," said Deepak Jasani, Head of Retail Research at HDFC Securities.
Heavyweight bank stocks surged 4.1%, while the financial services index jumped 3.8%, driving a surge in the Nifty. Bank stocks dropped nearly 8% on Tuesday.
Some shorts being covered in banks due to weekly expiry has also driven the bank stocks up, Jasani said.
World shares rose on Wednesday and the dollar steadied with a European Central Bank policy meeting coming into focus following soft U.S. labour market data that firmed up bets of a September rate cut by the Federal Reserve.
Worries about a cooling U.S. economy, however, kept a lid on risk appetite. The focus in Asia stayed on Indian markets, with stocks rising after Tuesday's plunge as voting results showed a slimmer-than-expected victory margin for PM Narendra Modi.
The ECB meets on Thursday and money markets price in an almost certain chance of a first interest rate cut, but there is uncertainty about the future path for rates in the euro zone.
"I have a positive view on tomorrow's cut because it marks the end of an era of rate hikes that began two years ago," said Carlo Franchini, head institutional clients at Banca Ifigest.
"Now, we'll need to see the impact that rate cuts will have on domestic demand and the economic recovery."
Data on Wednesday showed euro zone business activity expanded at its quickest rate in a year in May as growth in services industry outpaced contraction in manufacturing.
Across the Atlantic, eyes were on the Bank of Canada's policy meeting later on Wednesday with traders expecting the central bank to begin its rate-cutting cycle.
The MSCI world equity index, which tracks shares in 49 countries, added 0.05% by 0802 GMT, supported by a positive open in Europe and gains in Asia.
The pan-European STOXX 600 index was up 0.5% and the MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.9%. The Nikkei in Tokyo fell 0.9% as the renewed strength in Japanese yen weighed.
Data on Tuesday showed U.S. job openings fell more than expected in April to the lowest level in more than three years, a sign that labour market conditions are softening.
The data emboldened bets of Fed rate cuts this year, with markets pricing in 45 basis points of easing. Traders are pricing in a 65% chance of a rate cut in September, compared with 46% a week earlier, CME FedWatch tool showed.
"I think there's a strange trade off between those who like that data as encouraging thoughts of rate cuts and those who are looking at things going on and that are not great news," said Rob Carnell, ING's regional head of research for Asia Pacific.
"Asia wants to find a little bit of good news in the very mixed run out of numbers that we're seeing."
The market focus will also be on the U.S payrolls report due on Friday. Wall Street futures pointed to gains of 0.1-0.2% for the S&P 500 and X% for the tech-heavy Nasdaq.
Benchmark 10-year note yields were at 4.3552% on Wednesday, after hitting an almost three-week low of 4.314 on Tuesday following the jobs data. [US/]
Germany's 10-year government bond yield, the benchmark for the euro zone, was steady at 2.543% after its sharpest two-day drop since March.
The dollar index, which measures the U.S. currency against six peers, was 0.1% higher at 104.29, just above the near two-month low of 103.99 it hit on Tuesday.
The dollar's relentless strength in the recent past will make way for minor weakness over the next 12 months, according to a Reuters poll of strategists who generally agreed the dollar was overvalued.
The dollar's retreat helped the yen strengthen to a more than two-week high of 154.55 per dollar on Tuesday. On Wednesday, it weakened to 156.11.
In commodities, oil prices hovered near four-month lows as traders weighed an OPEC decision to boost supply later this year and an increase in U.S. crude and fuel stocks.
Brent crude futures were last at 77.71 per barrel, up 0.25%, while U.S. West Texas Intermediate crude futures traded at $73.41 a barrel, up 0.2%.
Sensex Today Live : Indian benchmark indices soared on Wedensday towards the path to recovery, after two key NDA allies, the JD (U) and TDP, reiterated their support to the single largest party BJP in the incoming parliament to form the government.
Markets had closed nearly 6% lower on Tuesday, after BJP failed to sercure a majority on its own, for the first time in the past three Lok Sabha elections.
Sensex, which had opened higher at 73,027.88, touched an intraday high of 74,534.82, before paring some of the gains to close at 74,382.24, up 2,303.19 points, or 3.20%.
Similarly, the Nifty 50, which had opened higher at 22,128.35, climbed to a high of 22,670.40 in intraday trades, but pared some of its gains to close at 22,620.35, up 735.85 points, or 3.36%.
Vinod Nair, Head of Research of Geojit Financial Services, "Indian market exhibited a spirited recovery driven by broad based buying across various sectors, as political stability appears assured. However, attention will remain on the formation of the government and the forthcoming RBI policy meeting. The market does not expect any change in RBI’s policy stance given persistent high food inflation, and an expectation of an increase in government spending, which has led to a notable traction in FMCG stocks".
Reinforcing the emerging clarity regarding the formation of a BJP-led government, Vaibhav Porwal, Co-founder of Dezerv, said, "Investors should keep in mind that a BJP-led coalition government is not necessarily bad for the economy, and this is not the first time we will see a coalition government. From 1989 to 2014, our GDP grew by more than 8% annually while a coalition government was at the Centre. What we saw in the markets yesterday was a knee-jerk reaction".
Barring one stock, Larsen & Toubro, all other stocks on the 30-stock BSE Sensex closed in green, with IndusInd Bank, Tata Steel, Mahindra & Mahindra, Bajaj Finance, and Kotak Mahindra Bank, emerging as the top gainers for the day.
Meanwhile, barring two stocks, Larsen & Toubro and BPCL, all other stocks on the 50-stock Nifty 50 ended in the green, with Adani Ports & SEZ, IndusInd Bank, Hindalco Industries, Tata Steel and Mahindra & Mahindra emerging as the top gainers for the day.
The broader market also closed higher, with the BSE MidCap index gaining 4.41% and the BSE SmallCap index climbing 2.93%.
However, cautioning investors about investing in momentum stocks or small cap stocks, Porwal said thay have remained overheated over the past two years. "Any sustained period of sideways or downward movement in momentum stocks can trigger a sell-off in these stocks. Investors, therefore, should consider the risk involved before making such investments."
All the sectoral indices were trading in the green, having gained between 2.3% to 5.8%. The Bank, Auto, Financial Services, FMCG and Metal indices had gained more than 4% each.
Regarding the future outlook of the market, Porwal added, "A steep fall in the market without any structural change in the fundamentals must be regarded as an opportunity. We believe that investors should capitalise on this opportunity for fresh investments in equity".
Sensex Today Live : All the sectoral indices were trading in the green, having gained between 2.3% to 5.8%. The Bank, Auto, Financial Services, FMCG and Metal indices had gained more than 4% each.
Sensex Today Live : The broader market was up, with the BSE MidCap index gaining 4.48% and the BSE SmallCap index climbing 2.93%.
Sensex Today Live : All of the stocks on the 50-stock Nifty 50 were trading in the green, with IndusInd Bank, Adani Ports & SEZ, Hero MotoCorp, Mahindra & Mahindra and Tata Steel emerging as the top gainers.
Sensex Today Live : All the stocks on the 30-stock BSE Sensex were trading in green, with IndusInd Bank, Tata Steel, Mahindra & Mahindra, and Bajaj Finance, emerging as the top gainers.
Sensex Today Live : Indian benchmark indices were climbing towards the path to recovery on Wedensday, with investors' sentiment showing signs of firming up after the results of the 2024 Lok Sabha elections saw the BJP emerge as the single largest party in parliament, and its coalition NDA crossing the majority mark of 272 seats. Focus now shifts to the formation of a new government.
At 3 pm, Sensex was up 2,302.95 points, or 3.20%, at 74,382 and Nifty was up 732.60 points, or 3.35%, at 22,617.10.
Sensex Today Live : Dhruv Consultancy Services today announced that it has been shortlisted by Director General – Republic of Mozambique, and Project Implementation Unit, Externally Aided Projects, Public Works Department, Manipur, seperately, to submit requests for Proposal to provide consultancy services to them.
The project in Mozambique, for which it has been shortlisted along with Tritia Engenharia Lda, involves, "consultancy services for High Crash Locations evaluation, Design of Roads Improvements, Preparation of Tender Documents, Support to ANE, IP during the Bidding Period and Supervision of the Implementation of the Works from the office of Director General – Republic of Mozambique".
Separately, the project in Manipur involves work related to, "Consultant towards Construction Supervision Consultant for Improvement of roads within Imphal city with rigid pavement including concrete lined drains from the office of The Project Director-cum-Chief Engineer, Project Implementation Unit, Externally Aided Projects, Public Works Department, Manipur".
Sensex Today Live : Jubilant Pharmova today announced that it has received $115.9 million towards the sale of its 25.8% stake in Sofie.
JPL had invested $25 million in Sofie in November 2020. In January 2024, Sofie entered into a merger agreement with private equity firm Trilantic Capital Partners, North America.
Consequently, JPL had planned to sell its entire stake in Sofie for an aggregate proceeds of about $142.9 million.
JPL has been informed by Sofie, that the merger transaction has been closed on May, 31, 2024 as per their sale transaction documents and consequently, JPL has received $115.9 million as a part of the consideration.
The company, in an exchange filing, said $1.2 million is being held in an escrow account for any post-closing adjustments. Apart from that, a sum of up to $25.8 million may be received by the company upon achievement of certain future milestones, the company added.
Sensex Today Live : Kewal Kiran’s Q4 revenue grew 10% y/y, but the 19.3% EBITDA margin slightly lagged ARe
Better working capital led to higher, ₹1.4bn/1.3bn, OCF/FCF generation (FY23 ₹0.8bn/0.5bn)
Company strengthened presence in women’s wear by acquiring 50% stake in Kraus Casuals for ₹1.7 bn
Management revised FY25 revenue growth guidance to 15-18% (15-20% earlier), excl. the recent acquisition, due to tough market conditions, with 18-20% EBITDA margins
Growth ahead would be driven by SSSG, the channel mix, network expansion and category extensions to kids’ and women’s wear.
We lower our FY25e/26e revenue/ EBITDA ~3%/4% on average each year on the revised guidance. We haven’t factored in Kraus Casuals’ acquisition. We upgrade our rating to a Buy, with a lower 12-mth ₹811 TP (earlier ₹831), 18x FY26e EV/EBITDA.
Sensex Today Live : Indian benchmark indices were climbing towards the path to recovery on Wedensday, with investors' sentiment showing signs of firming up after the results of the 2024 Lok Sabha elections saw the BJP emerge as the single largest party in parliament, and its coalition NDA crossing the majority mark of 272 seats.
Focus now shifts to the formation of a new government.
At 2 pm, Sensex was up 1,864.6 points, or 2.59%, at 73,943.65 and Nifty was up 602.85 points, or 2.75%, at 22,487.35.
Sensex Today Live : The special audit of the company directed by the RBI has been concluded.
Sensex Today Live : The company has established a wholly-owned subsidiary, Nuvama Wealth Management (DIFC), in Dubai.
Sensex Today Live : The IT firm has partnered with Zscaler to launch Wipro Cyber X-Ray, an AI-assisted decision support platform.
Sensex Today Live : The company has secured a ₹547 crore order from Rail Vikas Nigam.
Sensex Today Live : Indian benchmark indices were climbing towards the path to recovery on Wedensday, with investors' sentiment showing signs of firming up after the results of the 2024 Lok Sabha elections saw the BJP emerge as the single largest party in parliament, and its coalition NDA crossing the majority mark of 272 seats.
At 1 pm, Sensex was up 1,476.2 points, or 2.05%, at 73,555.25 and Nifty was up 468.90 points, or 2.14%, at 22,353.40.
Sensex Today Live : Lupin today announced that its Switzerland-based subsidiary Lupin Atlantis Holdings SA, has completed the transaction to acquire Sanofi's portfolio of brands AARANE in Germany and NALCROM in Canada and the Netherlands, along with their trademark rights.
Sensex Today Live : Kotak Mahindra Bank today announced that it has received the RBI's approval to sell a 70% stake in Kotak Mahindra General Insurance to Zurich Insurance Company for a consideration of ₹5,560 crore.
The company, in an exchange filing, said it has received all the necessary approvals for the transaction to proceed.
Sensex Today Live : Barring PSU Bank, all other sectoral indices were trading in the green, with the FMCG, Auto, Pharma, Healthcare, and IT indices leading the pack in gains.
Sensex Today Live : The broader market was in the green, with the BSE MidCap gaining 2.81% and the BSE SmallCap up 1.81%.
Sensex Today Live : Only five stocks, BPCL, Larsen & Toubro, Power Grid Corp., Grasim Industries, and SBI, out of the 50 on the Nifty 50 were trading in the red, while Tata Consumer Products, Hindustan Unilever, Hero MotoCorp, Mahindra & Mahindra, and Asian Paints were the top gainers.
Sensex Today Live : Only three stocks, Larsen & Toubro, Power Grid Corp., and SBI, out of the 30 on the BSE Sensex were trading in the red, while Hindustan Unilever, Mahindra & Mahindra, Asian Paints, Nestle India, and Kotak Mahindra Bank were the top gainers.
Sensex Today Live : Indian benchmark indices were climbing towards the path to recovery on Wedensday, with investors' sentiment showing signs of firming up after the results of the 2024 Lok Sabha elections saw the BJP emerge as the single largest party in parliament, and its coalition NDA crossing the majority mark of 272 seats.
At 12 pm, Sensex was up 1,249.23 points, or 1.73%, at 73,328.28 and Nifty was up 387.10 points, or 1.77%, at 22,271.60.
Sensex Today Live : It’s evident that the BJP’s failure to address rural economic issues has negatively impacted its performance in the Lok Sabha election.
This is particularly noticeable in Uttar Pradesh, a BJP stronghold, where they suffered losses in key constituencies like Ayodhya. This is despite Prime Minister Narendra Modi’s participation in the grand inauguration of the Ram Temple in January, fulfilling a long-standing BJP promise. (Read the full story here.)
Sensex Today Live : The stock market had been optimistic about the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) winning a comprehensive victory in India’s 18th Lok Sabha election. However, the BJP emerged as the single-largest party but fell short of the exit poll predictions and its previous tally in the 17th Lok Sabha.
This led to a recalibration of market expectations. The fact that the BJP did not secure a majority on its own further impacted market sentiment. Consequently, the S&P BSE Sensex dropped by 5.7% on June 4, with public sector units and Adani Group stocks experiencing significant selling pressure. (Read the full story here.)
Sensex Today Live : The 2024 Lok Sabha election marked a surprising turn of events as the Bharatiya Janata Party (BJP), led by the undefeated Prime Minister Narendra Modi, faced defeat. This unexpected outcome has sparked numerous discussions and conjectures.
A significant observation from this election is that the BJP failed to secure a majority. This development has several implications, including the resurgence of the Congress party, the survival of Nitish Kumar from Janata Dal-United, and the comeback of Chandrababu Naidu from the Telugu Desam Party.
However, before delving into the main reasons for this setback, it’s worth noting some crucial subplots. (Read the full story here.)
Sensex Today Live : Indian benchmark indices were climbing towards the path to recovery on Wedensday, with investors' sentiment showing signs of firming up after the results of the 2024 Lok Sabha elections saw the BJP emerge as the single largest party in parliament, and its coalition NDA crossing the majority mark of 272 seats.
At 11 am, Sensex was up 1,032.94 points, or 1.43%, at 73,111.99 and Nifty was up 346.15 points, or 1.58%, at 22,230.65.
Sensex Today Live : Angel One today announced that the number of clients on its platform jumped 63.3% to 23.83 million in May 2024, from 14.59 million in the same period last year.
Average daily orders increased 83.5% to 7.56 million, from 4.12 million in the year ago period.
Total number of orders processed by the platform increased 75.2% YoY to 158.72 million, from 90.60 million in the year-ago period.
Sensex Today Live : Nazara Technologies today announced that its subsidiary Absolute Sports, the parent company of Sportskeeda.com and ProFootballNetwork.com, has signed an asset purchase agreement to acquire all of the assets of SoapCentral.com, a premier source of entertainment content in the US.
The transaction is for an all-cash consideration of $1.4 million (around ₹11.6 crore) and is expected to be closed in the next 30 days. In CY23, SoapCentral.com had revenues of US $621K (around ₹5.2 crore). Absolute Sports will use its cash reserves to fund the transaction, the company said in an exchange filing.
Sensex Today Live : Garden Reach Shipbuilders & Engineers today announced that it has signed a contract worth $16.6 million from Bangladesh Inland Water Transport Authority to supply one trailing suction hopper dredger.
The company, in an exchange filing, said, "We wish to inform you that the Company has entered contract with the Bangladesh Inland Water Transport Authority (BIWTA) for the Procurement of 01 (One) No. Trailing Suction Hopper Dredger (Hopper Capacity 1000 m3) with spare parts".
Sensex Today Live : Indian benchmark indices were trading on a muted note after opening in the green on Wedensday, following the results of the 2024 Lok Sabha elections that saw the BJP emerge as the single largest party in parliament, and its coalition NDA crossing the majority mark of 272 seats.
At 10 am, Sensex was up 64.58 points, or 0.09%, at 72,143.63 and Nifty was up 28.65 points, or 0.13%, at 21,913.15.
Sensex Today Live : "The market will take some time to absorb the unexpected election results. Stability will return to the market soon but volatility will continue till there is clarity on the cabinet and the key portfolios. A sharp rebound in the market is unlikely in the near term but sectoral preferences might change. Sectors like FMCG, healthcare and IT will find increasing preferences and the momentum plays will slowdown.
One positive of the sharp market correction is that the excessive valuations have moderated a bit and this will facilitate institutional buying once clarity emerges on the formation and composition of the cabinet.
Investors can start nibbling at high quality largecaps in IT, financials, autos and capital goods."
--Dr. V K Vijayakumar, Chief Investment Strategist of Geojit Financial Services
Sensex Today Live : KEC International today announced that it has secured new orders worth ₹1,002 crore in the civil segment.
The projects involve residential buildings in northern and southern India from renowned real estate developers, and construction of official residences and associated facilities for senior Defence officials in India.
Sensex Today Live : Novelis Inc., a subsidiary of Hindalco Industries, has delayed its IPO due to market conditions. The company, which had planned to raise $810 million to $945 million, will reassess the offering’s timing. AV Minerals (Netherlands) NV and another shareholder were to sell 45 million Novelis shares in the IPO.
Sensex Today Live : Across sectors, the FMCG, IT, Media, Pharma, Private Bank, and Healthcare indices were green, while PSU Bank, Metal, Realty, Oil & Gas, Consumer Durables, Bank, Auto and Financial Services indices were down in the red.
Sensex Today Live : The broader market was in the red, with the BSE SmallCap losing 1.20% and the BSE MidCap down 0.45%.
Sensex Today Live : 15 of the 50 stocks on the Nifty 50 were trading in the red. Hindustan Unilever, Britannia Industries, Nestle India, Hero MotoCorp and HCLTech were the top gainers, while Hindalco, Power Grid Corp., Laresn & Toubro, Adani Ports & SEZ, and Adani Enterprises, were the top drags.
Sensex Today Live : Only five stocks, Power Grid Corp., Larsen & Toubro, NTPC, ICICI Bank, and Axis Bank, out of the 30 on the BSE Sensex, were trading in the red, while Hindustan unilever, Mahindra & Mahindra, Nestle India, HCLTech, and Asian Paints were the top gainers.
Sensex Today Live : Indian benchmark indices opened in the green on Wedensday, following the results of the 2024 Lok Sabha elections that saw the BJP emerge as the single largest party in parliament, and its coalition NDA crossing the majority mark of 272 seats.
At opening bell, Sensex was up 672.84 points, or 0.93%, at 72,751.89 and Nifty was up 147.60 points, or 0.67%, at 22,032.10.
Sensex Today Live : "In a dramatic downturn, Nifty 50 recorded its biggest single-day plunge in over four years, falling 6%, as bears took control of Dalal Street following the BJP's failure to secure a clear majority in the elections. The Narendra Modi-led BJP leads with 293 seats, but concerns over the new government's ability to implement bold policies weighed heavily on the market. GIFT Nifty remains subdued despite Modi's victory speech, with technical indicators pointing to a trading range of 21,000-22,500. Meanwhile, WTI crude oil futures dropped to a four-month low, offering some relief. Eyes are now on the RBI's three-day MPC meeting. Preferred trades: Nifty to sell at 22,200-22,500 with targets at 21,500/21,000, and Bank Nifty to sell at 47,500-47,700 with targets at 46,077/45,701. Bearish on Dixon Technologies, CUB, and Exide.
--Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd
Sensex Today Live : Indian benchmark indices were up at pre-open on Wedensday, following the results of the 2024 Lok Sabha elections that saw the BJP emerge as the single largest party in parliament, and its coalition NDA crossing the majority mark of 272 seats.
Sensex was up 954.88 points, or 1.32%, at 73,033.93 and Nifty was up 243.85 points, or 1.11%, at 22,128.35 during pre-open.
Sensex Today Live : In the wake of the National Democratic Alliance (NDA) government’s decision to overlook populist welfare measures and freebies in its interim budget for FY25, analysts and political observers suggest that these could be reintroduced by the next government. This comes as the Bhartiya Janata Party (BJP) faces a weakened position, necessitating reliance on allies for a third term in office and further political capital building.
The full-year budget for FY25 may reflect these changes, particularly given the government’s windfall from an unexpectedly large Reserve Bank of India dividend of ₹2.11 trillion for FY24, according to a source close to the Modi government. (Read the full story here.)
Sensex Today Live : Hindalco, TaMo, SBI, GPT Infra, IIFL Finance, are a few stocks likely to be in focus on Wednesday, 5 June.
Sensex Today Live : Following Tuesday’s severe downturn, India’s key equity indices, Sensex and Nifty 50, are projected to open higher on Wednesday due to short-covering. The Gift Nifty trends suggest a gap-up start for the Indian benchmark index, trading around the 22,060 level, nearly 150 points above the Nifty futures’ previous close.
The domestic equity indices experienced a significant drop on Tuesday, marking their worst session in over four years. This was triggered by election results indicating that the incumbent Bharatiya Janata Party (BJP) may need to rely on alliance partners to secure a third term in power. The Sensex plunged by 4,389.73 points (5.74%) to close at 72,079.05, while the Nifty 50 fell by 1,379.40 points (5.93%) to settle at 21,884.50.
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, noted that the Nifty 50 formed a large, long negative candle on the daily chart with a lower shadow. He stated that the Nifty recovered from near the lower support of the 200-day Exponential Moving Average (EMA) around 21,250 levels, a support level tested after October 2023. This pattern suggests an attempt at a downside breakout of the larger high-low range of 23,000 - 21,700 levels. Shetti believes the short-term trend of Nifty is highly volatile with a negative bias, with immediate support placed around 21,250 levels (20-day EMA). (Read the full story here.)
Sensex Today Live : India’s leading equity indices, Sensex and Nifty 50, are poised for a cautious rebound on Wednesday following their worst performance in over four years. The market’s volatility was triggered by the Bharatiya Janata Party’s (BJP) failure to secure a clear majority in the Parliament’s lower house, leading to a slim majority government formed by the BJP-led National Democratic Alliance (NDA).
The political uncertainty in India contrasted with mixed trading in Asian markets and a rise in the US stock market. The latter was buoyed by weaker-than-expected job openings data, which raised hopes of a US Federal Reserve interest rate cut. Market expectations for a September rate reduction have increased to around 65%, up from less than 50% last week.
Tuesday saw a significant selloff in the Indian stock market as the Lok Sabha election results did not align with exit poll predictions, causing investor anxiety. The Sensex plummeted by 4,389.73 points (5.74%) to close at 72,079.05, while the Nifty 50 fell by 1,379.40 points (5.93%) to settle at 21,884.50.
Amisha Vora, Chairperson & MD of Prabhudas Lilladher, commented on the situation, stating that the markets are likely to shed the ‘Modi premium,’ leading to a correction in PSU and infra stocks. She advised investors to prepare for short-term volatility but reassured that the fundamental growth story of India remains robust. (Read the full story here.)
Sensex Today Live : Indian shares were expected to see a muted start on Wednesday after posting their worst day in over four years in the previous session, as a narrow win for Prime Minister Narendra Modi's alliance raised concerns about policy continuity.
The Gift Nifty was trading at 22,050 points as of 7:13 a.m. IST, indicating that the benchmark Nifty 50 will open marginally higher than its Tuesday close of 21,884.50.
According to the country's election commission, Modi's Bharatiya Janata Party won 240 seats, falling short of the 272 seats needed for a simple majority in the 543-member lower house of parliament.
NSE Nifty 50 and S&P BSE Sensex closed nearly 6% lower each on Tuesday as voting trends indicated that Modi's party would have to depend on at least three regional allies to form the government.
The outcome surprised the market as exit polls over the week-end had projected a much bigger margin of victory for the Modi-led National Democratic Alliance.
Foreign institutional investors (FIIs) sold a record 124.36 billion rupees (about $1.5 billion) worth of Indian shares on Tuesday, provisional data from the National Stock Exchange showed on Tuesday.
"In the new scheme of things, we need to assign a lower valuation multiple, to factor in coalition risks and its impact on the reform path," said Amar Ambani, executive director, YES Securities.
Many analysts said that some reforms taken during Modi's second term could face setbacks because of the coalition government and a stronger opposition.
Severe jolt to the BJP in states like Uttar Pradesh, Maharashtra and West Bengal will keep tricky reforms like divestment in state-run companies at bay, said Amnish Aggarwal, Director – Research, Prabhudas Lilladher.
Analysts see public sector companies, state-run banks, defence, infrastructure, capital goods coming under pressure due to uncertainties around reforms, but expect consumption-driven stocks and private banks to do well.
