Stock Market: The victory of the BJP alliance in Maharashtra and the return of JMM alliance to power in Jharkhand in the assembly election results can have a positive impact on the stock market in the coming weeks. Along with this, the November changes in MSCI, the world’s largest index, will start from Monday, due to which, according to the current status of the index and upcoming prospects, a positive trend can be seen for the market in the short-term.
In the coming week, the impact of the results of assembly elections held in many states of the country can also be seen on the stock market. At the same time, changes in MSCI are also going to start, some impact of which will also be seen on the market. These are some of the major factors that can impact the stock market this week-
The RSI has entered a bullish crossover near the oversold zone, indicating a positive movement. In the short term, sentiment is considered favorable for bullishness as long as the index remains above 23,600. Immediate resistance is seen at 23,960-24,000. A decisive move above 24,000 could trigger a rally towards 24,500. On the contrary, support has been kept at 23,750 and 23,550.
Assembly Elections
Market experts have described the Maharashtra election results as favorable for D-Street. Maharashtra is a big state and also the commercial capital of the country, whereas the defeat of Bharatiya Janata Party (BJP) in Jharkhand does not seem to have any adverse effect.
Let us tell you that the BJP led Mahayuti alliance has won the assembly elections in Maharashtra. Alliance won 230 out of 288 seats. This victory is expected to provide positive movement to the development of D-Street once the market reopens.
Whereas in Jharkhand, JMM Alliance has regained power by winning 56 out of 81 seats, which indicates that the situation in the state will remain the same.
MSCI November changes
The changes in Morgan Stanley Capital International (MSCI), the world’s largest index compiler, will start from Monday in November. In which BSE, Voltas, Alkem Laboratories, Kalyan Jewelers and Oberoi Realty will become part of MSCI Global Standard Index. As a result, India may see a net FII passive inflow of about $2.5 billion due to rebalancing.
Domestic markets will take cues from their overseas peers, especially Wall Street.
FII/DII action
On Friday, Foreign Institutional Investors (FIIs) were net sellers worth Rs 1,278.37 crore, while Domestic Institutional Investors (DIIs) were buyers (buyers) worth Rs 1,722.15 crore.
Foreign portfolio investors (FPIs) have been net sellers of Indian equities worth Rs 26,533 crore so far in November. The total outflow so far this year i.e. 2024 is Rs 19,940 crore. It was Rs 1,00,245 crore at the end of September.
Rupee vs Dollar Factor
The Indian rupee reached its lowest level of 84.5075 against the US dollar on Friday and then closed at a higher level. In fact, when the US dollar reached its highest level in two years, the currency got support due to the intervention of the Central Bank, so it closed at a higher level. However, the currency remained slightly lower at the weekly rate.
The dollar index reached a peak point of 108.09 on Friday. This is the highest level since November 2022. Before this it had increased by 0.5 percent to reach 107.69. The greenback got a boost from weakness in the euro and the British pound after weak economy data from Germany and the UK.
Meanwhile, the Reserve Bank of India (RBI) has also asked traders to avoid buying spot dollars to execute arbitrage trades. Anshul Chandak, treasury head of RBL Bank, says, “It is expected that the rupee will fall to 85 against the dollar by the end of December.”
So far in November, the rupee has weakened by about 0.5 percent. In fact, overseas investors withdrew more than $4 billion from local equity and debt, which also weakened the rupee. Apart from this, after the election victory of Donald Trump on November 5, the dollar has increased.
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