Rama Krishna Sangem
Fears of stock markets crashing over ruling BJP defeat in Karnataka assembly elections have been proved wrong. The markets which opened on May 15, Monday, first after declaration of results which saw thumping victory for Congress fared well, dispelling all uncertainties. Many analysts have predicted that the markets which were closed Friday, May 12 might see marginal dip, by 1-2 per cent were off the mark.
The key benchmark indices rallied on Monday to fresh calendar year highs as investors cheered fall in CPI inflation to an 18-month low of 4.7 per cent in April. Further, WPI inflation dipped into negative zone to -0.92 per cent in the same month. Rate sensitive sectors, such as auto, banks and real estate stocks logged smart gains.
The S&P BSE Sensex scaled a high of 62,563, but pared some gains towards the end of the trading session. The BSE benchmark eventually ended 318 points higher at 62,346. The Nifty 50 hit a high of 18,459, and finished the day with a gain of 84 points at 18,399.
Tata Motors was the top gainer among the Sensex 30 stocks, hitting an over 6-year high at Rs 537 on strong Q4 earnings in intra-day trade. Tata Motors said it remains optimistic w.r.t demand in FY24, despite near term uncertainties, while anticipating moderate inflation ahead.
ITC, meanwhile, was up nearly 2 per cent and was the other major gainer. Tech Mahindra, Hindustan Unilever, Larsen & Toubro, and Infosys were the other prominent gainers. In the broader market, the BSE Midcap and Smallcap indices added 0.4 per cent and 0.87 per cent, respectively. Sectorally, Realty index soared 4.3 per cent. The FMCG index was up 1 per cent, while the Auto and Bankex added 0.6 per cent each.
Congress win expected
A major reason for stock markets doing well on Monday is that Congress which came to power in Karnataka is not against to reforms. Moreover, its role as the ruling party in Karnataka is limited on financial sector. Both the contenders for CM post – Siddaramaiah and DK Shivakumar – are known for business friendly approach, DKS himself is a businessman. The new government will continue to be pro-business in Bangalore and other hubs in Karnataka.
