Dalal Street Sees BJP’s Win In Gujarat, Himachal Positive For Market, Economy 

Indian equity benchmarks recovered after a steep decline in morning trade as it emerged that Bharatiya Janata Party is set to win more seats in Gujarat than early leads indicated and form a government in the state.

The BJP got a majority primarily because of its corruption-free and development-focused policies, Nirmal Jain, chairman at brokerage IIFL, told BloombergQuint in an interaction. “The markets are positive on long-term growth and the economy is on a path to a definitive recovery.”

IIFL View

Sanjiv Bhasin, IIFL's executive vice president for markets, said the benchmark Nifty is expected to touch 10,700 level by the end of this year. The rally will be driven by earnings and liquidity in the second half of the next financial year, but oil prices could be a worry, he said.

No Disruption To Reforms, Says Ajay Srivastava

Today is the day where you change the narrative for the market and remove scepticism, Ajay Srivastava, managing director at Dimensions Corporate Finance, said. “With BJP leading, it tells us there will be no disruptions in the market due to the significant reforms.”

• Early movements in equity indices suggest that there is a little fear and that is very good for the market.
• The focus should be on jobs and the economy now.
• One segment which might take a possible hit is the oil marketing sector.
• If there are no disruptions, the Indian market is set for a 25 percent upside in the next financial year, with large-cap stocks driving the rally.

Early Indicator Of Improving Economic Cycle: Ajay Bagga

Election results are an early indicator of an improved economic cycle and a bull market, independent market expert Ajay Bagga said. He expects 2018 to be a good year for Indian stocks.

• GDP growth, corporate earnings and corporate earnings-to-GDP ratio bottomed out in the last quarter.

Also Read: How Foreign Investors Will React To Election Results

BJP Win Positive For Economy, Investors: Porinju Veliyath

The victories in Gujarat and Himachal are significant as they show that voters have put their faith in the BJP despite the short-term pain, Porinju Veliyath, managing director at Equity Intelligence India, said. “This win is also pointing to a victory in 2019 for the ruling party. This is very positive for the country, economy and investors.”

Markets Back To Fundamentals After State Polls: Andrew Holland

Indian stocks will revert to fundamentals and will continue to “be driven by” liquidity for the time being after results of the two state elections were out on Monday, Andrew Holland, chief executive officer at Mumbai-based Avendus Capital Ltd., told Bloomberg in an email.

• The Union Budget, expected in February, will be the next key event for investors.
• There will be high investor expectations from the national government to spur economic growth, raise infrastructure spending and reduce the corporate tax rate.
• It will be difficult for the government to maintain fiscal discipline if commodity prices continue to rise.
• Expect company earnings to finally show growth in the next financial.
• Expect NSE Nifty 50 Index trading in the 10,000-10,500 range till the budget.

Time To Focus On Earnings, Budget Now: Deven Choksey

Time has come to focus more on reforms and not just keep talking about cast and religion, Deven Choksey, managing director at K.R. Choksey Shares & Securities, said.

Investors will focus on earnings and Budget as elections end, Choksey told BloombergQuint in an interview. The Gujarat and Himachal Pradesh polls indicate a clear win for the BJP, even as the margin seems to be narrower than expected, Choksey said.

Besides, Choksey expects NSE Nifty 50 Index to trade in 10,000-10,750 range till February.

Market Breathes A Sigh Of Relief, Citrus Advisors Says

The market is breathing a little better after the BJP managed to secure victories in the two key states, said Citrus Advisors' founder Sanjay Sinha.

Next up, Sinha said the Union Budget, expected in February, will take centre stage. Overall, he expects stocks to trend upwards in anticipation of a double-digit earnings growth in the current quarter.

(With inputs from Bloomberg)

For live Gujarat election results, click here! Click here for live updates on Himachal Pradesh election results.