Indian equity markets are poised for a significant rally as indicated by the GIFT Nifty, which shows a premium of over 400 points, signaling a robust gap-up opening for the Sensex and Nifty 50 indices. This optimism follows the resounding victory of the ruling Mahayuti alliance in the Maharashtra state assembly elections, where the BJP-led coalition secured 233 out of 288 seats.
Market sentiment is buoyed by expectations that this electoral success will further bolster the central government’s policy continuity, especially its infrastructure agenda. Analysts at Kotak Securities noted that BJP’s recent wins, including its triumph in Haryana, are likely to support the government’s infrastructure push, with central capex in H2FY25 expected to provide a near-term boost to market sentiment.
However, Kotak also cautioned against elevated market valuations and potential risks, including inflationary pressures and weakening consumption trends. For now, investors are pinning hopes on the government’s ability to drive execution and maintain fiscal discipline amid these challenges.
