Election results to cheer markets…bet on high beta stocks

The verdict is out…its 4-0 in favour of the BJP and SGX Nifty indicates a 180 up move for the Nifty  today.

Without doubt the results are better than expected – in Delhi the verdict is mixed with the AAP doing really well in their first outing and in Chattisgarh it was a bit of touch and go…but the anti-Congress vote is very evident.  Also the states that went to election will send 72 seats to the Lok Sabha – in the last election BJP had 30 of these seats, going by this result they could end up with 55-60 seats of this. Also is it safe to assume that UP, Maharashtra too reflect an anti-Congress vote?  This would put a whole new spin on what numbers BJP could end up with in the General Election in 2014.

US data on the other hand was much better than expected – the Dow and Nasdaq responded positively putting aside taper worries – it remains to be seen how the numbers influence FII investment in emerging markets because that would definitely be the main factor to look beyond trade today – for markets opening higher this monday is a given.

Lets enjoy the new highs and see how the markets can build on these gains!

The stocks that are likely to move up are Metals, Capital Goods, Infra – the under owned and high beta space will do better while FMCG, Pharma and IT could take a back seat.

 

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