Tale of the Tape 

Good evening everyone and welcome to the new trading week. 

Markets continued where they left off last week. Nifty and Sensex zoomed +1.3% each as investors welcomed the BJP’s landslide victory in key State assembly elections. Read our top story below to understand why this is such a big deal. Midcaps (+1.6%) and Smallcaps (+2%) also saw massive gains. The market breadth was extremely positive with 400+ stocks ending in the green on the NSE500. 

Like Friday, not a single sector ended lower. PSU Banks (+4%) were the stars of the show. Real Estate (+2.2%) and Pvt banks + NBFC were also up big time. 

Zomato rallied +5% after replacing JSW Steel in the Sensex. The Adani Group released their H1FY25 financials in its latest efforts to ease investor nerves. More details below. 

PSU Banks were on a tear. SBI, IDBI Bank and Indian Bank jumped between 4%-6% each. Check out their charts below. 

HDFC Bank rose +3% intraday to hit a new all-time high; crossed the Rs 1,800 p/sh for the first time.

Genesys International rallied +8%. Elara Capital has a 12-month target price of Rs 1,370 p/sh; indicating a 65% upside from current levels!

Shakti Pumps was locked in a 5% upper circuit after announcing a 5:1 bonus issue. Shareholders will receive 5 bonus shares for every share held. 

IGL (+4%) followed in the footsteps of MGL and increased CNG prices by Rs 1.5-4 p/kg in areas around Delhi. 

Central Bank of India jumped +9% after announcing a partnership with Generali Group to enter the insurance business.

Order win. KEC International (+5%) won multiple new orders worth Rs 1,114 cr. RVNL (+4%) bagged an Rs 837 cr from Eastern Railways. 

Here are the closing prints:

Market
Politics of Stock Market

Markets were up big time after a clean sweep by the ruling BJP-led NDA government in key State assembly elections. The Nifty jumped ~2% intraday to hit a 3-week high. Fun fact: 400+ stocks on the NSE500 ended in the green! 

Why is this important? Politics and markets go hand in hand. For Maharashtra, the last five years were characterized by political instability, with frequent horse trading at work for the CM post. This decisive verdict ends the chronic instability in one of India’s most industrialized and economically important states (13.5% of India GDP). Fun fact: this is the first time in 60 years that an an opposition party has failed to secure 10% of seats which is the bare minimum for appointing a Leader of Opposition in the assembly. 

Markets are optimistic that the Govt can once again focus on boosting the economy as political risk recedes. PS - Govt spending on Capex is down -17% YoY in the first 6 months of FY25. Pick-up in rural demand thanks to govt welfare schemes and healthy monsoons + wedding season (30% more weddings in 2024) paint a positive picture. 

Add to this, the fact that markets have corrected ~10% from their all-time highs (some sectors even down 40%-50%) and valuations whilst still expensive but digestible makes for a great time to buy, say experts. Motilal Oswal is bullish on Banks & NBFCs, Capital goods, Real Estate and Manufacturing sectors to name a few. Check out the Stocktwits Sentiment Meter:

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Buy The Dip In Reliance?

Reliance Industries is down -30% from its all-time highs. Is this worst priced in or should you expect further pain? Check out our latest YouTube video for all the answers and bonus trade ideas by SEBI registered experts.