Mumbai, Nov 16 (IANS) As the NDA stormed back to power in the Bihar assembly election with a commanding mandate, the Indian stock markets are projected to react positively to this victory, considering that it will add stability to the coalition at the Centre, analysts said on Sunday.

“Unlike the past trend, the actual results were in line with the exit polls but the mandate was stronger this time,” said JM Financial Institutional Securities in its latest note.

The recently launched women-centric cash transfer scheme played a major role in improving the voter turnout – especially among women, which reflected in the assembly results as well.

“The decisive mandate in Bihar in favour of the NDA and the magnitude of shift in votes from the opposition parties (RJD and Congress) sends a clear signal of the political appeal of the BJP and its allies,” the note added.

Indian equity markets ended the week on a strong note, with benchmark indices gaining on the resolution of the U.S. government shutdown, supported by strong domestic fundamentals, stronger-than-expected Q2 earnings, and easing inflation.

Toward the week’s close, the NDA’s Bihar election victory bolstered investor confidence, said market watchers, adding that political sentiment was buoyed by the NDA victory in the Bihar elections, strengthening overall risk appetite.

Markets staged a strong rebound during the week, ending firmly in the green after the recent phase of weakness. Sentiment was upbeat from the start, supported by favourable domestic cues.

Both benchmark indices gained over one and a half per cent, with the Nifty closing at 25,910.05 and the Sensex settling at 84,562.78.

Investor confidence improved significantly after India’s retail inflation cooled sharply to 0.25 per cent in October from 1.44 per cent in September, aided by GST rate cuts and easing food prices. Wholesale inflation also slipped into negative territory at -1.21 per cent in October, driven by softer crude oil and non-food article prices.

–IANS

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