After plunging over 600 points in opening trade, the benchmark indices recouped most of their losses on Monday.
Finance Minister Arun Jaitley’s assurance that the Modi government would continue with its reforms agenda went a long way in assuaging markets jittery from the BJP defeat in Bihar elections.
The Nifty closed 39 points down (0.49 per cent) at 7,915 while the Sensex closed 144 points down (0.55 per cent) at 26,121.
Shreyash Devalkar, Fund Manager – Equities, BNP Paribas Mutual Fund, said, “Markets made a stunning recovery in today’s trade. Markets opened deep in the red today as investors fretted over the state of economic reforms in the country following a dismal BJP loss in Bihar. However, investor fears were allayed after the Finance Minister sought to separate the rout in Bihar from economic reforms.”
Credit rating agency Fitch maintained its medium-term economic outlook on India.
Thomas Rookmaaker, Director, Fitch Ratings’ Asia-Pacific Sovereigns team, in a statement said: “The election results are not likely to impact decisions by foreign investors in other States and a big win for the BJP in Bihar would not have led to sufficient support in the Rajya Sabha anytime soon anyway. With continued opposition, the government will likely continue to try and pass legislation via ad hoc political deals, and if that does not work it may continue to resort to implementation of reforms at the State level.”