Sensex jumps 3,000 points in 2 days. Can Maharashtra elections wipe away Q2 tears?
Sensex rising over 3,000 points, animal spirits are back on Dalal Street as Street favourite NDA's victory in Maharashtra elections made investors look beyond the downgrades seen in the forgettable Q2 earnings season.
PSU stocks and those linked to the capex theme were the biggest gainers in Monday's session and rallied up to 11% with PSU rail stock RITES leading the charge. PSU bank stocks, led by the Central Bank, surged up to 8% while construction stocks like J.Kumar Infraprojects shot up to 16% during the day.
The resurgence in the performance of the BJP in assembly elections after failing to secure a majority in Lok Sabha elections helped assuage investor concerns about the government's policy priorities and development agenda.
PSU stocks and other capex-linked stocks were underperforming for a while amid investor doubts regarding the slow progress of government spending, especially capex.
«On an immediate basis, we should see improvement in government capex spending momentum and order inflow in sectors such as railways and defence. For debt markets however, we are entering a phase of imprudent state fiscal management and hence higher State Development Loan (SDL) supply,» Elara Capital's Garima Kapoor said.
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