Delhi Election Results: How will Indian stock market move after BJP’s victory? Key technical levels for Nifty, Sensex
- Delhi Election Results: D-Street experts say BJP's victory will likely to positively impact the market in the short run, with the electoral victory being a major achievement for the ruling dispensation.
Delhi Election Results: The Indian stock market may react positively when it re-opens for regular trading activities on Monday after Bharatiya Janata Party (BJP)'s stellar show in the Delhi Assembly Elections 2025. The saffron party overthrew the Aam Aadmi Party (AAP) to win 48 of 70 assembly seats, easily crossing the halfway mark needed to form a government in the national capital.
BJP has returned to power in the union territory after almost three decades. D-Street experts say the BJP's victory in the Delhi elections 2025 is a major boost for the party in power at the Centre. Sentiments in the Indian market are slowly improving in response after Budget 2025 and an interest rate cut relief.
“The victory of the BJP in the Delhi elections is a major achievement for the ruling dispensation. This is likely to positively impact the market in the short run. However, the medium to long-term trend in the market will depend on the recovery in GDP growth and earnings recovery,” said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Indian stock market's performance last week
Domestic equity benchmarks continued their upward momentum for the second consecutive week, with the Nifty 50 rising 0.33 per cent to close at 23,559.95 and the BSE Sensex rising 0.46 per cent to settle at 77,860. Registering its third day of decline, the 30-share BSE Sensex dropped 197.97 points or 0.25 per cent in a volatile trade on Friday.
The Reserve Bank of India (RBI)'s Monetary Policy Committee (MPC), headed by new RBI Governor Sanjay Malhotra, slashed the benchmark repo rate by 25 basis points (bps) to 6.25 per cent. This was the first reduction since May 2020 and the first revision after two-and-a-half years.
However, the interest rate cut failed to excite investors who were expecting measures from the central bank to boost liquidity. The Indian rupee has sunk to record lows and posted its worst week in over two years, on the back of a stronger US dollar and persistent foreign portfolio outflows from India.
The market's positive sentiment was largely driven by the improved domestic outlook following Budget 2025 and US President Donald Trump's temporary suspension of import tariffs on Canada and Mexico, easing global trade worries.
Rate-sensitive sectors such as banking, financials, and auto led the initial recovery, supported by forecasts of an interest rate cut. Strength was witnessed in metal, IT, and pharma stocks, which aided the overall positive momentum. Despite the gains, some factors kept the upside in check. Subdued Q3 earnings, persistent rupee depreciation, and sustained foreign fund outflows weighed on the market.
Nifty, Bank Nifty technical levels to watch
From a technical standpoint, Nifty 50 index successfully held its immediate support i.e. 23,400 at the 20-day exponential moving average (DEMA) on Friday. The recent swing low of 23,200 remains a crucial support level to sustain a positive positional bias, while the 23,900 mark serves as a major resistance.
According to Ajit Mishra – SVP, Research, Religare Broking Ltd, a breakout above this level could drive the Nifty 50 index towards 24,200. From a technical perspective, experts also added that the Nifty 50 reclaimed its position above the 21-day EMA, with RSI holding above 50 and MACD signaling a bullish crossover, highlighting sustained market strength.
“The index decisively broke above its previous swing high, with the formation of a bullish engulfing pattern on the weekly chart, signaling further upside potential,” said Puneet Singhania, Director of Master Trust Group.
The D-Street expert added that the index remained volatile throughout the week but managed to close positive for the second consecutive week, sustaining above the 23,450–23,500 zone, signalling a potential bottom reversal.
Nifty 50 continues to trade decisively above the critical 21-day EMA, reinforcing positive sentiment and indicating further upside momentum. A move toward the 23,800-resistance level appears likely, while a breach below 23,250 could attract selling pressure, dragging the index toward 23,000.
Bank Nifty surged 1.32 per cent last week, marking its second consecutive weekly gain and signalling a potential trend reversal from its prolonged downtrend. The index decisively closed above its 21-day EMA and a three-week consolidation range, confirming a shift from a negative to a positive trajectory.
According to Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Intermediates Ltd, the Bank Nifty has formed a red candle near its previous resistance point of 50,600. However, on the weekly scale index has formed a green candle, confirming the bullish engulfing pattern formed last week.
Also Read: RBI kicks off rate cut cycle after a 5-year lull; will this cause Nifty 50 to reclaim the 25K mark?
Trading strategy after Delhi election results
Amid various developments, investors are advised to focus on stock selection based on sectoral trends. Most key sectors, except FMCG, are showing rotational participation. “However, caution is advised in the midcap and smallcap segments, as broader market volatility remains a concern,” said Ajit Mishra.
"The RBI’s recent 25 bps repo rate cut to 6.25 per cent has enhanced liquidity, boosting investor confidence. Despite short-term volatility, the trend remains positive, supporting a “Buy on Dips” strategy," said Singhania of Master Trust.
Experts say factors like uncertainties on US President’s trade policies and retaliatory tariffs, a relatively hawkish stance from the US Fed and continued capital outflows pose some challenges to the global and domestic equity markets.
“As long as Bank Nifty sustains above 49,700, it is likely to move towards 50,700, whereas a breakdown below this level could lead to a decline towards 49,200. A buy on dips strategy is recommended focusing on accumulating positions near support levels for potential upside opportunities,” said Singhania.
"On the downside, the immediate support for the Bank Nifty index is near 49,650, while on the upside, 50,600 will function as resistance. Traders should closely monitor these levels for potential opportunities," said Yedve.
Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions, as market conditions can change rapidly, and individual circumstances may vary.
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