On June 5, benchmark equity indices Sensex and Nifty opened on a positive note after significant losses in the previous session. The recovery was driven by value-buying at lower levels, leading to an upward trend in the markets.
The 30-share BSE Sensex surged 948.83 points to 73,027.88 in early trade, while the NSE Nifty climbed 247.1 points to 22,131.60.
In the political landscape, although the NDA maintains a comfortable majority in the 543-member Lok Sabha, the BJP, with 240 seats, has fallen short of the majority mark for the first time since 2014 and relies heavily on its allies to form the government. The Congress secured 99 seats.
According to a report by Motilal Oswal Research, despite the BJP’s reduced majority, it is expected that the Modi 2.0 government will continue its policy agenda focused on investment-led growth, capex, infrastructure creation, and manufacturing, with some adjustments. Additionally, populist measures might be introduced to address rural distress and improve sentiment.
Among the Sensex constituents, Hindustan Unilever, Nestle, Asian Paints, HCL Technologies, HDFC Bank, Kotak Mahindra Bank, and ITC were the top gainers, while Larsen & Toubro, Power Grid, NTPC, and State Bank of India were the laggards.
V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that the market will need time to adjust to the unexpected election results. He anticipates that stability will return, though volatility may persist until there is clarity on the new cabinet and key portfolios. Vijayakumar also highlighted that the sharp market correction has moderated excessive valuations, which could encourage institutional buying once the cabinet’s composition is clear.
In Asian markets, Seoul and Hong Kong were trading higher, while Tokyo and Shanghai saw declines. U.S. markets closed in positive territory on June 4. Meanwhile, global oil benchmark Brent crude slightly decreased by 0.04% to $77.49 a barrel.
