Gujarat Election Exit Polls Create A Bull Run

Market This Week:

The market continued last week's optimism and started on a positive note. Investors were worried about Gujarat elections and were waiting for some positive news to enter the market again. Exit polls came in favor of BJP and investors cheered the market as Nifty rallied 100 points at the opening bell while Sensex surged 300 points. Good buying has been seen today especially in the companies which are based in Gujarat. Gujarat election rally can pass resistance level of the market next week. Winter Session started today and the productive session is expected to pass on in coming days.

Movers And Shakers:

Post exit polls outcome, Gujarat based companies surged in the stock market. Gujarat welcomed BJP exit polls. Most of the Gujarat based companies saw huge buying in the stock market. Companies like Gujarat Alkalies and Chemicals Ltd rose 6%, Gujarat Narmada Valley Fertilizers and Chemicals Ltd jumped 6% at the opening bell, Gujarat Heavy Chemicals Ltd surged 6% and touched its 52-week high.

Shilpi Cable Technologies continued its downturn followed by negative numbers and negative cash flows. Recently Swiss Finance Corp sells 1.5% stake in Shilpi Cable Technologies. Steel Exchange of India Ltd continued to be in the lower circuit and falling nearly 5% every day.

Key Market Drivers:

Post RBI Monetary policy delivery based volume increased in most of the fundamentally stable stocks. US Fed didn't surprise the market as rate hiked by 25 bps and market digested rate hike very well as we have seen good buying start from the opening bell. But apart from RBI policy and US Fed Policy, investors are eyeing firmly at Gujarat elections.

WPI numbers spike from 3.59 in October to 3.93 in November while CPI also jumped in November to 4.88. In November WPI, vegetable prices jumped by 60% on Y-o-Y. Inflation is increasing but on the other side growth is falling down which is not a good indicator.

Events To Watch:

Gujarat elections are driving the market towards the north direction as exit polls are in favor of BJP. Last week was in dilemma as both the parties were fighting hard to stay in the hunt but exit polls gave some clarity on coming results.

Winter Session kick-started today and it will help to drive the market until 5th January, 2017. The proceedings of the Lok Sabha on the first day of Winter Session were adjourned after the House paid tributes to three sitting and seven former members who died during the inter-session period. The Government is expected to start the debate on 25 pending bills and 14 new ones. There has to be a productive debate in order to come up with innovative solutions for the betterment of the country.

Stocks To Watch:

GNFC is on the upside while Shilpi Cable Technologies is on the downside.