BJP’s Win in Bihar Could Lift Sensex to New Highs

DoThe Best
By DoThe Best September 22, 2015 12:14

BJP’s Win in Bihar Could Lift Sensex to New Highs

A win for the BJP in the forthcoming Bihar elections could propel Sensex and Nifty to all-time highs by the end of this year, said Nischal Maheshwari, co-head of institutional equities and head research at Edelweiss Securities.

“If BJP wins Bihar, I think definitely market is going to be on a roll. I think that is a major event. Our base case is that BJP is going to win Bihar. I won’t be surprised that markets hit a new high by the end of December,” he said in an interview with NDTV.

According to Mr Maheshwari, a win in Bihar would embolden the government to call for an early winter session of Parliament, paving way for the approval of the Goods and Services Tax.

“There are a lot of things basically which can get panning out if Bihar works the way of BJP…. There is a high chance that GST gets passed,” he added.

The Bihar Assembly elections will be held in five phases from October 12 and results will be declared on November 8.

The Reserve Bank of India’s policy review on September 29 will be another near-term trigger for Indian markets, Mr Maheshwari said.

“We strongly believe that it should be 50-basis-point cut,” he added.

Outlook on Indian Economy

Some recovery in car and commercial vehicle sales point to likely improvement in economic growth in the third and fourth quarters, Mr Maheshwari said. The approval of the ‘One Rank, One Pension’ scheme for defence personnel, which will put Rs 15,000 crore to Rs 20,000 crore in the hands of the people, and the upcoming seventh pay commission will help boost demand, he added.

Sectoral/Stock Bets

Among consumer staples, Mr Maheshwari is positive on Jubilant Foodworks, which runs the Domino’s Pizza chains in India. It will be a beneficiary of demand recovery in the Indian economy, he added.

Edelweiss favours IT and pharma stocks due to the depreciation in rupee

DoThe Best
By DoThe Best September 22, 2015 12:14
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