Stock Market Today Live Updates: BSE Sensex, Nifty50 to continue slide on less than expected Modi-led NDA show?

Morgan Stanley’s Riddham Desai has shared his insights on the recent election verdict and its potential impact on the Indian equity markets. According to Desai, the firm’s medium to long-term views remain unchanged despite the outcome of the elections.

He expects both realized and implied volatility to decrease in the coming days, suggesting a more stable market environment. However, Desai points out that the equity markets have not yet priced in the possibility of “unresolvable disagreements within the NDA coalition,” which could potentially lead to some uncertainty.

Despite this, Desai believes that the pace of reforms is unlikely to slow down following the election results. He also expresses confidence that the government will continue to prioritize macro stability as the foundation of its economic policy, rather than sacrificing it for short-term gains.

According to Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, the unexpected election outcomes will require some time for the market to digest. Although stability is expected to be restored in the near future, fluctuations will persist until there is transparency regarding the cabinet and crucial portfolios. In the short term, a significant market recovery is improbable, but sector-specific preferences may shift. Industries such as FMCG, healthcare, and IT will gain increasing favor, while momentum plays will decelerate, he said.

The sharp market correction has one advantage: it has slightly reduced the excessive valuations, which will encourage institutional buying once the cabinet’s formation and composition are clarified.

Investors can begin accumulating high-quality largecaps in sectors such as IT, financials, autos, and capital goods, he says.

Mahesh Nandurkar from Jefferies shares his insights on the potential outcome of the elections and its impact on various sectors. He maintains that the most likely scenario is a coalition government with Narendra Modi at the helm.

Despite the uncertainty surrounding the elections, Nandurkar remains optimistic about the housing-led capital expenditure cycle. He believes that any extreme market reactions to the election results could present a lucrative buying opportunity for investors, according to an ET report.

According to Nandurkar, large-cap stocks that have underperformed in the recent past offer the most attractive risk-reward ratio. He particularly favors private banks, consumer staples, and automotive original equipment manufacturers (OEMs). However, he has reduced his overweight stance on real estate, industrials, and public sector undertakings (PSUs).

Stock market crash: The domestic markets experienced a significant intraday decline yesterday, the largest in over four years, as the election results indicated the NDA’s return to power but with a reduced majority. Today’s trading session will focus on various companies, including Tata Motors, Wipro, RIL, SJVN, NTPC, and Canara Bank, due to recent developments.

SJVN anticipates its 900 MW Arun-3 hydro-electric project in Nepal, currently under construction, to commence power generation from the following year, as approximately 75% of the work has been completed.

PSU stocks will remain in the spotlight today following a significant sell-off on Monday, which was triggered by the NDA securing a lower-than-expected majority in the Lok Sabha elections.

Tata Motors‘ board has given the green light to establish a wholly-owned subsidiary, proposed to be named TML Commercial Vehicles Ltd (TMLCVL), to manage its commercial vehicles business.

RIL, a major constituent of the Nifty50 index, will be closely watched today after the company’s investors lost around Rs 1.27 lakh crore on Tuesday.

Wipro has partnered with Zscaler to introduce “Wipro Cyber X-Ray,” an AI-assisted decision support platform.

Infosys has announced a collaboration with Nihon Chouzai (TSE) to expand healthcare access in Japan by enhancing online medication guidance services.

NTPC is reportedly planning to venture into the nuclear power sector by establishing a 10 GW capacity with an investment of Rs 1.5 lakh crore over a 10-year period.

Canara Bank has reportedly initiated the process of seeking regulatory approval to convert its software services subsidiary into a non-banking finance company.

On Tuesday, U.S. stocks experienced a modest increase following the publication of weaker-than-expected labor market data. This information strengthened the notion that the Federal Reserve may soon lower interest rates. The data released on Tuesday showed that U.S. job openings in April fell to the lowest level in more than three years, suggesting a softening of labor market conditions. This development is consistent with the anticipated Fed rate cut in the near term. As a result, U.S. Treasury yields declined after the report’s release.

In early Asian trading on Wednesday, oil prices continued to slide slightly from the previous session after an industry report indicated increases in U.S. crude and fuel stockpiles. This news further exacerbated concerns regarding demand growth. Brent crude futures fell 14 cents, or 0.2%, to $77.38 a barrel by 0005 GMT. U.S. West Texas Intermediate crude futures fell 18 cents, or 0.3%, to $73.07 a barrel.

Gift Nifty (formerly SGX Nifty) indicates a positive opening

Nifty futures on the Gift Nifty rose by 103 points, or 0.47%, to trade at 22,050

Investment professionals hold the view that capital expenditure, undertaken by both the government and private enterprises, plays a crucial role in driving economic growth. They emphasize the importance of private sector investment, which has been significantly lacking in recent years, and stress that it should either supplement or complement the government’s capital expenditure efforts.

Given India’s favorable macroeconomic fundamentals, fund managers believe that any positive developments on the global stage could provide additional support to the domestic economy. These potential tailwinds include improving macroeconomic conditions in China and interest rate reductions in the United States.

The upcoming Budget for the fiscal year 2024-2025 is expected to be a key determinant of the future trajectory of the Indian economy and financial markets. Market participants will closely monitor the budget announcements and their potential impact on various sectors and overall economic growth prospects.

Stock market live updates: Fund managers in India are hopeful that the new government will maintain the current momentum of economic reforms and policies that support the industry. They anticipate that the BJP-led alliance, despite having a reduced mandate, will persist with the initiatives and projects initiated by the previous government. This sentiment prevails even amidst the apprehension that gripped investors following the announcement of the Lok Sabha election results on Tuesday.

Furthermore, financial experts believe that the election outcome, which is seen as a setback for the ruling alliance but a significant boost for the opposition, has the potential to temper the surging bull market in India and bring valuations to a more reasonable level. Most believe that even though the BJP-led alliance now has a depleted mandate, it would continue the works and projects launched under the outgoing govt.

Stock market crash: The stock prices of all 11 Adani Group companies plummeted on Tuesday, resulting in a staggering loss of Rs 3.6 lakh crore for investors. The crash was attributed to the reduced mandate for the BJP-led NDA coalition. Since Prime Minister Modi took office in May 2014, opposition parties have claimed that the Adani Group has gained the most. Investors speculate that a weakened NDA mandate could cause the group to lose its competitive edge. Additionally, the group would face increased scrutiny from a more powerful opposition.

According to dealers, these factors contributed to the decline of Adani Group stocks in Tuesday’s crashing market. BSE data revealed that the group’s combined market capitalization dropped from Rs 19.4 lakh crore on Monday to Rs 15.8 lakh crore as stock prices of Adani Group companies plunged during the day.

The group’s flagship company, Adani Enterprises, led the decline with a 19% crash, eroding its market cap by Rs 80,416 crore. Adani Ports, which will soon join the sensex, lost nearly Rs 72,800 crore, or a fifth of its market value, bringing its current level to Rs 2.7 lakh crore. Other group companies also suffered significant losses, with Adani Green Energy losing nearly Rs 62,000 crore and Adani Power losing about Rs 58,300 crore in market value.

India has secured the second position in the global IPO market, raising $4 billion in the current year. With the NDA expected to form the next government, the IPO boom is likely to continue throughout 2024 due to anticipated policy stability. Although the amount raised by India is 45% lower than the total collected in 2023, according to LSEG data, it surpasses China ($3 billion) and Saudi Arabia ($2.1 billion). India’s IPO proceeds also exceed the combined amount raised in Turkey, Hong Kong, and South Korea. The US remains the top IPO market, having raised $14 billion so far in 2024, as per LSEG. India has climbed from the 11th position in 2019 to the third place globally in terms of IPO proceeds, following the US and China in 2023.

Between January and the present, India has witnessed 113 IPOs. Mahavir Lunawat, MD at investment bank Pantomath Capital Advisors, said, “Amidst general elections, the primary market remained vibrant with the solid response to certain IPOs like Awfis Space Solutions. Confidence can be gauged by these offerings that have been launched amidst elections… Looking ahead, the market is set to witness a flurry of IPOs, from new-age business as well as from conventional business segments.”

Several prominent companies, including Hyundai Motor India, Tata Capital, Ola Electric Mobility, Swiggy, and NSDL, are planning to launch their IPOs in the near future.

According to UBS, “After a weak political outcome, we believe investors will focus on govt formation and the choice of prime ministerial candidate considering the BJP does not have a simple majority of its own.” The other focus areas would be “policy choices to support growth vis-a-vis ensuring macro stability, and the reform narrative”.
UBS analysts said they would watch out for upcoming union budget announcements, implementation of labour laws and the next set of reforms in land and capital.

“This was not an election outcome the market valuations were set up for. Indian valuations have been expensive for pretty ordinary corporate earnings growth/outlook. One of the arguments behind India’s rich valuations has been the political stability/policy certainty afforded by a strong govt. Some of those assumptions could now come under question,” the report by UBS said.

Stock market live updates: According to Pradeep Gupta, Co-founder & Vice-chairman, Anand Rathi Group, the Indian stock markets experienced significant volatility in response to the 2024 Lok Sabha election results with broader indices, Nifty 50 closing the day at -5.93%, with the lowest of the day touching -8.19%. Here are the key reactions and insights based on recent market movements and expert analyses by Anand Rathi.

•Immediate Market Reaction:

The markets saw heightened volatility due to the uncertainty surrounding the election outcomes mainly due to the gap between the exit polls and the actual results declared today. The pre-election rally witnessed yesterday, driven by expectations of a BJP victory, had already been factored into market prices. Till the question of the continuity of the current government was at an unsure position, the markets continued with heightened volatility in the short term period.
•Long-Term Outlook:

Historical data suggests that despite initial volatility, markets tend to recover and even thrive in the longer term. For instance, even after the 2014 and 2019 elections, the Indian stock market saw significant gains in the months following the election results. Investors are advised to focus on long-term strategies, such as maintaining a diversified portfolio and avoiding panic selling. Strong fundamentals and resilience against political changes are crucial for navigating market volatility.

•Sectoral Impact:

Sectors like infrastructure, defence, and capital goods are expected to benefit from policy continuity and government focus on development projects.
Large-cap stocks are preferred for their stability and resilience against economic fluctuations. In summary, while the immediate market reaction to the election results has been volatile, the overall long-term outlook remains positive, particularly if policy continuity is maintained. Investors are encouraged to stay informed, focus on fundamentals, and be prepared for short-term fluctuations.