Just as the polling for the 16th Lok Sabha witnessed heavy voter turnout, equity analysts across the country are amazed to see heavy investor turnout in the pre-results rally that has seen Gujarat-based stocks soaring day after day.

Creating a buzz among equities, Gujarat-based companies have seen increased buying on the stock exchanges over the past three trading sessions since Friday. “There is a general mood about change in Government. We’ve already seen it through a high voter participation in polling; similarly, it is now panning out through high investor participation in the rally ahead of results,” said S Ranganathan, Head of Research, LKP Shares.

With most exit polls indicating clear majority for the BJP-led National Democratic Alliance, expectations of investors are high about the governance model that the BJP’s prime ministerial candidate Narendra Modi has showcased in Gujarat.

“It is not wrong for market participants to expect the Gujarat model to be followed in other parts of the country.

“This is the reason foreign institutional investors (FIIs) are going gung-ho about the new Government,” said Ranganathan.

“Modi hails from Gujarat. He understands that region and its issues. There is an overall expectation that he will announce packages to support industries in his home State,” said Rikesh Parikh, Vice-President — Equities, Motilal Oswal Securities. Among the private companies, Adani Enterprises, Adani Power, Torrent Power, Adani Ports & Special Economic Zone were some of the infrastructure players that witnessed heavy buying on Tuesday.

Chemicals stocks such as Deepak Nitrite, Gujarat Fluorochemicals and GHCL were among the gainers. Also, textile and pharma companies including Arvind, Ashima and Zydus Wellness were among leading gainers.

State-run companies such as Gujarat State Fertilizers & Chemicals, Gujarat Narmada Vally Fertilizers & Chemicals, Gujarat State Petronet and Gujarat Gas Company also reported gains.

(This article was published on May 13, 2014)
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