Indian Markets Set for Bullish Start After Political Stability Boost
The Indian stock market is poised for a positive opening on Monday, with benchmark indices Sensex and Nifty 50 expected to climb following the resounding victory of the BJP-led NDA alliance in the Bihar elections. This political development has significantly improved market sentiment and is likely to enhance stability for the coalition government at the Centre.
Global Market Context and Domestic Performance
While Asian markets displayed mixed trends on Monday, the Gift Nifty was trading around 26,017 level, representing a premium of nearly 66 points from the Nifty futures' previous close. This indicates a strong positive sentiment for Indian stock market indices at the opening bell.
On Friday, the Indian market demonstrated resilience by recovering from intraday lows to close in positive territory. The Sensex gained 84.11 points, or 0.10%, to settle at 84,562.78, while the Nifty 50 advanced 30.90 points, or 0.12%, to close at 25,910.05.
According to Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services Ltd, "With retail inflation easing and the corporate earnings season concluding positively, the backdrop remains supportive for Indian equities. We expect markets to stay firm, with a potential India-US trade deal announcement offering scope for a sharper up-move."
Key Market Triggers and Global Developments
Market participants are closely monitoring several crucial factors this week that could influence trading patterns:
- FOMC meeting minutes and their implications for interest rate policies
- Progress in the India-US trade deal negotiations
- Foreign fund flow patterns and their impact on market liquidity
- Trends in gold prices and other commodity markets
- Various global and domestic macroeconomic data releases
In international markets, Wall Street ended mixed last week amid concerns that the Federal Reserve might delay interest rate cuts in December. The Dow Jones Industrial Average declined 0.65% to 47,147.48, while the S&P 500 eased 0.05% to 6,734.11. The Nasdaq managed to close 0.13% higher at 22,900.59, supported by gains in technology stocks.
Political Victory and Economic Implications
The BJP-led NDA registered a historic landslide victory in the Bihar Elections 2025, capturing an impressive 202 of the 243 seats in the state assembly. The opposition Mahagathbandhan could only secure 35 seats. This decisive mandate is viewed positively by markets as it strengthens political stability at the central government level.
Other significant global developments include President Donald Trump's executive order rolling back tariffs on various agricultural imports, progress in US-China rare earths negotiations, and proposed legislation for sanctions on countries doing business with Russia.
In commodity markets, gold prices rose 0.3% to $4,097.22 an ounce, halting two consecutive days of losses. Meanwhile, Bitcoin prices experienced volatility, falling below $93,714 on Sunday before paring some losses to trade around $95,000.
Asian markets presented a mixed picture, with Japan's Nikkei falling 0.39% and South Korea's Kospi rallying 1.43%. Japan's economy contracted an annualized 1.8% in the July-September quarter, marking the first decline in six quarters, though this was better than the expected 2.5% fall.
