Maharashtra Election Results: What does BJP-led NDA victory mean for the Indian stock market? — Explained

Maharashtra Election Result: After the BJP-led NDA's one-sided victory in the Maharashtra Assembly Elections 2024, experts have started mulling its impact on the Indian stock market when it resumes trade activity on Monday. According to experts, NDA's victory in the Maharashtra Assembly Election would positively impact investors' sentiment. They expect investors to switch their strategies from defensive to aggressive.

Reaction from stock market experts

Speaking on the impact of a possible landslide victory of the BJP-led NDA in the Maharashtra Assembly Election, Palka Arora Chopra, Director of Master Capital Services, said, "In Maharashtra, the BJP-led Mahayuti alliance is set to form the government. This Maharashtra Election Result is expected to provide political stability, positively impacting investor sentiment, especially in infrastructure, urban development, and manufacturing sectors aligned with BJP policies."

Will the pullback rally continue?

"The stability in Maharashtra could trigger a rally in the stock market, boosting investor confidence due to the continuity of pro-business policies, especially after uncertainty following previous coalition shifts. Furthermore, with a clear mandate, the government will likely push forward with infrastructure projects, a key focus of the BJP, which would benefit the construction, real estate, and related sectors," said Palka Arora.

Expecting a boost for the Indian stock market sentiments post-Maharashtra Election Result, Santosh Meena, Head of Research, Swastika Investmart, said, "On Friday, the Indian stock market witnessed a strong rally after the prediction of NDA's victory in Maharashtra Assembly Election 2024. It is likely to boost market sentiments further after the one-sided victor of the BJP-led NDA in Maharashtra Election Result."

Stock market strategy

Expecting a change in investors' stock market strategy, Mahesh M Ojha, AVP—Research at Hensex Securities, said, “After the Lok Sabha Election Results, Indian stock market investors went defensive and started looking at FMCG and pharma stocks. However, after the Maharashtra Assembly Election Results, they may start looking at railway, infra, and banking stocks, changing their investment strategy from defensive to aggressive.”

Avinash Gorakshkar, Head of Research at Profitmart Securities, said, "The Maharashtra Election Results have established that momentum is still with the incumbent government (both at New Delhi and Maharashtra). So, investors are expected to look at the rail and infra segment as the Government of India (GoI) and Maharashtra State Government have showcased a special focus on these segments. As infra sector companies would go for credit lines from the banks, banking stocks may also see some buying interest when the market opens on Monday."

Indian stock market outlook

“Nifty found strong support at 23,200, which aligns with the 61.8% retracement of its previous rally from the election-day low of 21,281 to the high of 26,277. The index reclaimed its 200-DMA with a bullish harami candlestick formation, signalling a potential trend reversal. Immediate resistance is at the 20-DMA of 24,030, and a breakout above this level could push Nifty toward 24,550/25000 levels. On the downside, 23,500, near the 200-DMA, remains a critical support level. Similarly, Bank Nifty has held firm at its 200-DMA, with immediate resistance at 51,300–52,000 and a higher resistance zone at 52,600–53,300,” Santosh Meena of Swastika Investmart said.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.