With the dust settling on the Indian general elections, the market leaders are making a comeback
Fast-moving consumer goods giant Unilever, motorcycle manufacturer Hero MotoCorp, and HDFC Bank, among other large-cap stocks, performed well this week, with traders expecting this trend to continue
In the past week, the Indian general election has been full of twists and turns. With Modi's re-election coming to an end, on Friday afternoon, the Indian stock indices Sensex and Nifty both rose by more than 2%. The Indian SENSEX30 index regained all the losses from the day of the election results announcement and hit a new record high.
It is worth mentioning that after the election results were announced, the atmosphere in the Indian stock market gradually changed. Over the past year, mid-cap and small-cap stocks have been favored, with these small-cap stocks becoming a barometer of market sentiment, often breaking traditional valuation and technical indicators.
However, following the unexpected election results, investors have shifted their focus back to the previously overlooked large-cap stocks. Fast-moving consumer goods giant Unilever India, motorcycle manufacturer Hero MotoCorp, and HDFC Bank have performed well this week, and traders expect this trend to continue.
In addition, the Reserve Bank of India announced its latest interest rate decision today, maintaining the rate at 6.5%. The RBI Governor will hold the first press conference after the election results are announced, and the market is particularly interested in any possible changes in the central bank's monetary policy stance.
Despite the global trend of interest rate cuts intensifying, with the ECB just announcing a rate cut, economists generally expect the RBI to not follow suit for the time being, but rather wait for action from the Federal Reserve. The central bank had previously paid a hefty dividend to the government, coupled with expectations of abundant monsoon, cooling inflation, and a leading global economic growth outlook, the new government currently should have no major concerns on the fiscal front.
The market's focus is on the new government's policy agenda and direction, which will determine future investment deployment. Looking ahead, inflation, economic, and monetary policies remain the most critical variables affecting the Indian market