A potential stock market trend reversal indicates BJP-led NDA victory

With the BJP-led NDA securing a landslide victory in the Maharashtra Assembly Elections, stock market experts predict significant positive shifts in investor sentiment. As the market reopens on Monday, this political stability is expected to influence a strategic shift from defensive to aggressive investment approaches, particularly favoring sectors like railways, infrastructure, and banking.

Palka Arora Chopra, Director of Master Capital Services, emphasizes that the BJP-led Mahayuti alliance's expected formation of the Maharashtra government will provide much-needed political stability. This stability is anticipated to bolster investor confidence, especially in sectors such as infrastructure, urban development, and manufacturing, which align closely with BJP's pro-business policies.

Potential for a Stock Market Rally

According to Palka Arora, the continuity of pro-business policies under a stable government is likely to trigger a stock market rally. This is expected to enhance investor confidence, particularly in the construction, real estate, and related sectors, as the government pushes forward with key infrastructure projects.

Market Sentiments and Strategy Shifts

Santosh Meena, Head of Research at Swastika Investmart, noted a strong market rally on Friday following predictions of the NDA's victory. He expects this trend to continue, further boosting market sentiments with the confirmation of the BJP-led NDA's one-sided victory.

Mahesh M Ojha, AVP of Research at Hensex Securities, predicts a strategic shift among investors. Following the Lok Sabha elections, investors adopted a defensive approach, focusing on FMCG and pharma stocks. However, with the Maharashtra election results, the focus is expected to shift towards railway, infrastructure, and banking stocks, marking a transition from defensive to aggressive strategies.

Infrastructure and Banking Stocks in Focus

Avinash Gorakshkar, Head of Research at Profitmart Securities, highlights that the Maharashtra Election Results reinforce momentum with the incumbent government both at the central and state levels. This continuity is expected to drive investor interest in the rail and infrastructure sectors. As these sectors seek credit lines from banks, banking stocks are also poised for potential growth.

Technical Analysis and Market Trends

Santosh Meena of Swastika Investmart provides a technical analysis, noting that the Nifty index found strong support at 23,200, which aligns with the 61.8% retracement of its previous rally. The index reclaimed its 200-DMA with a bullish harami candlestick formation, indicating a potential trend reversal. Immediate resistance is at the 20-DMA of 24,030, and a breakout above this level could push Nifty towards 24,550/25,000 levels. On the downside, 23,500 remains a critical support level. Similarly, Bank Nifty has held firm at its 200-DMA, with immediate resistance at 51,300–52,000 and a higher resistance zone at 52,600–53,300.

The BJP-led NDA's landslide victory in the Maharashtra Assembly Elections is expected to bring political stability and bolster investor confidence, leading to a positive shift in market sentiment. As the market opens on Monday, sectors aligned with BJP's policies, particularly infrastructure, urban development, and banking, are expected to see increased investor interest, potentially driving a market rally and strategic shift from defensive to aggressive investments.