Stocks trade higher as BJP looks set to form government in Gujarat

The domestic equity market rose on December 8 after initial leads showed that the incumbent Bharatiya Janata Party (BJP) was likely to form the government in Gujarat, brightening the prospects of the party retaining its power at the Centre in 2024.

BJP was seen leading on 146 out of 182 seats in Gujarat, comfortably above the halfway mark. Congress was leading on 22 seats in the state while Arvind Kejriwal’s Aam Aadmi Party (AAP) was leading on nine seats, data on CNN News 18 showed.

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The incumbent BJP appeared to form government in the Gujarat assembly with the highest seat-share since the 2002 elections, when the current Prime Minister Narendra Modi was the party’s chief minister candidate.

At 10:20 am, the Nifty 50 index was 0.2 percent or 45 points at 18,605, while the BSE-Sensex was at 65,569 points, up 0.3 percent or 158 points.

A landslide victory in PM Modi’s home state of Gujarat would further re-affirm the market’s confidence of continuity of the current regime of BJP at the Centre after the General Elections in 2024, dealers said.

“This (Gujarat election performance) comes as a positive surprise for the market. I think BJP’s performance, based on initial leads, appears better than what the market was expecting. It will definitely raise expectations from the BJP in the general elections,” said Pankaj Karde, group executive vice president at YES Securities.

Karde said that the Gujarat assembly poll results will offer comfort to investors on the continuity of the policy mechanism at the Center level even beyond 2024. “I would love to see continuity in policy as an investor,” Karde said.

In Himachal Pradesh, the initial counting showed a tight race between the BJP and the Congress. BJP was seen leading on 31 seats out of 68 in the state while the Congress had a lead on 33 seats. A party needs more than 35 seats to form a government.

Further, sentiment on Dalal Street was aided by the continued reopening of the Chinese economy after the country’s government faced intense protests over its strict ‘Zero COVID’ policy.

Nifty Metal index was up 0.3 percent on the hope that reopening of the Chinese economy will boost global demand for commodities as well push their prices higher amid continued supply constraints.

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