Indices may rally as BJP sweeps Maharashtra

GIFT Nifty:

The GIFT Nifty December futures contract is trading 338.50 points higher, indicating a positive opening for the Nifty 50. This uptick comes on the back of the Bharatiya Janata Party (BJP)-led Mahayuti alliance's resounding victory in the Maharashtra Assembly elections, where it secured a comfortable and decisive majority.

The BJP-led Mahayuti alliance delivered a sweeping win in Maharashtra, with the BJP itself claiming a record-breaking 132 seats. In total, the Mahayuti won 235 out of the 288 assembly seats, comfortably crossing the majority mark and consolidating its position in the state.

On the other hand, the INDIA bloc, led by the Jharkhand Mukti Morcha (JMM), emerged victorious against the BJP-led NDA in the Jharkhand Assembly elections. The bloc won 56 out of the 81 seats, with Chief Minister Hemant Soren's JMM securing 34 seats, the Congress winning 16, and the RJD taking four seats. Additionally, the Communist Party of India (Marxist-Leninist) Liberation [CPI(ML)(L)], a constituent of the INDIA bloc, claimed two seats.

Institutional Flows:

Foreign portfolio investors (FPIs) sold shares worth Rs 1,278.37 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 1,722.15 crore in the Indian equity market on 19 November 2024, provisional data showed.

According to NSDL data, FPIs have sold shares worth over Rs 41872.83 crore (so far) in the secondary market during November 2024. This follows their sale of shares worth Rs 1,13,858.81 crore in October 2024.

Global Markets:

The Dow Jones index futures were up 252 points, signaling a strong opening for U.S. stocks today.

Asian stocks advanced on Monday following US President-elect Donald Trump's decision to nominate hedge fund executive Scott Bessent as Treasury Secretary. Market participants view Bessent as a balanced choice, one that could enhance stability in the US economy and financial markets.

Bessent has expressed support for Trumps proposed tariff and tax cuts but is broadly expected to prioritize economic and market stability over political agendas. His nomination may help alleviate some of the global concerns regarding the broader impacts of Trumps policies on international economies and currencies.

On Friday, US stocks moved higher as industries poised to benefit from the incoming administrations pro-business and deregulation policies outperformed. The Dow Jones Industrial Average led major indices, gaining nearly 1% to close at 44,296.51 points. Meanwhile, the S&P 500 added 0.35% to finish at 5,969.30 points, and the NASDAQ Composite rose more modestly, inching up by 0.16% to 19,003.65 points.

Among individual stocks, Boeing Co. surged over 4%, boosting the broader industrials sector. The aircraft manufacturers gains came after it secured a $2.39 billion contract modification from the US Department of Defense.

Economic data released Friday pointed to steady momentum in the US economy. The S&P Global Manufacturing PMI for November rose slightly to 48.8 from Octobers 48.5, signaling a slower contraction. Meanwhile, the more critical Services PMI jumped to 57.0 from October's 55.0, reflecting robust activity in the services sector. These figures, coupled with last weeks strong jobless claims data, reinforce the view of a relatively healthy US economy.

Looking ahead, Asian traders will focus on key economic indicators this week. Japans inflation data will be closely scrutinized after Bank of Japan Governor Kazuo Ueda hinted that Decembers policy meeting could bring significant developments. Additionally, the Reserve Bank of New Zealand is expected to announce a rate cut on Wednesday, a move that could impact regional financial markets.

Domestic Market:

The domestic equity market concluded the session on a strong note, with the benchmark Nifty 50 index closing above the 23,900 level. A broad-based rally across sectors, led by IT, realty, and PSU bank stocks, propelled the indices higher. Strong US labor market data, signaling a rebound in job growth, boosted investor sentiment, particularly for IT stocks. Value buying in blue-chip stocks further contributed to the market's uptrend. The barometer index, the S&P BSE Sensex soared 1,961.32 points or 2.54% to 79,117.11. The Nifty 50 index surged 557.35 points or 2.39% to 23,907.25.

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