In a major blow to the Narendra Modi-led NDA (National Democratic Alliance) given the upcoming general elections 2019, TDP (Telugu Desam Party) had pulled out of the ruling majority NDA over the grant of special status to N. Chandrababu Naidu-led Andhra Pradesh steering the stock market to a mini-crash. TDP, being the second-largest ally to BJP with 16 MPs in the house seemed to have brought a wave of pessimism amid the market participants. The benchmark Sensex suffered a heavy jolt in the afternoon deals losing as much as 331.56 points to hit the day’s low of 33,353.98 on Friday. In today’s session of parliament, Narendra Modi-led NDA is all set to witness its first no-confidence motion. India Vix, the volatility reflector of the Indian equity markets, surged 5.04% to a day’s peak of 15.1050.
The S&P BSE Sensex bumped 318 points as big blue-chip shares such as Reliance Industries, ITC and HDFC tanked phenomenally posting a huge drag to the key equity index. Shares of Tata Motors (down 2.93%), Tata Steel (down 2.27%), ONGC (down 1.9%), Sun Pharma (down 1.76%), NTPC (down 2.33%), Adani Ports (down 1.78%), Reliance Industries (down 1.76%), ITC (down 1.41%), Asian Paints (down 1.33%), Kotak Mahindra Bank (down 1.26%), Hero MotoCorp (down 1.02%) and TCS (down 1.02%) were the top losers among the BSE Sensex components. While, on the other hand, shares of M&M and Bharti Airtel emerged as the only notable gainers among the 31 scrips of Sensex advancing to a monthly peak, a level last seen on 16 February after Jefferies upgrade. The stock of Bharti Airtel surged 1.3% to Rs 426 on BSE today.
Shares of Mahindra & Mahindra surged as much as 2.3% to a day’s high of Rs 752 on NSE on Friday. The research and brokerage firm Jefferies has upgraded the stock to “buy” from “hold” raising the target price to Rs 860 from Rs 820. Jefferies pointed out the favourable to Mahindra & Mahindra such as capital allocation, sustainability of tractor cycle, mispricing is a near-term opportunity. The performance of the shares of Mahindra & Mahindra has not reflected much of improvement in fundamental factors such as tractor and light commercial vehicle growth given higher government spending on the rural economy, infrastructure ahead of 2019 Lok Sabha elections, adding to it, Jefferis said a good monsoon will be an additional catalyst for the company.
The TMC (Trinamool Congress) supremo Mamta Banerjee, Chief Minister, West Bengal has welcomed the TDP’s decision to leave the NDA saying that current situation needs such action to save the country from disaster.