The Indian stock markets saw a rollercoaster ride over the last one and a half months, which coincided with the lengthy election process that finally concluded on June 1st. The volatility index or VIX, which measures market fluctuation levels, shot up dramatically from 13.4 to 24.6 between April 19 (when polling began) and May 31.
However, if you just looked at the benchmark BSE Sensex index, you wouldn’t guess there was so much drama underway. The Sensex barely budged during this period, ending at 73,961 on May 31 – just a tiny 1% higher than where it began on April 19.
While the major indices treaded water, some individual stocks soared against the tide of uncertainty. 10 stocks from the BSE 500 index managed stellar gains of 40% to as high as 77%, despite the election volatility. These were:
Cochin Shipyard (+77%): This government-owned shipbuilder was the top gainer, with its share price nearly doubling from ₹1,098 to ₹1,948.
Hindustan Zinc (+72%): The mining company saw its stock price leap from ₹399 to ₹687.
Bharat Dynamics (+70%): Another state-owned defense company racked up handsome returns for investors, climbing from ₹916 to ₹1,557.
Jupiter Wagons (+63%): This rail wagon manufacturer chugged higher from ₹370 to ₹602.
Finolex Cables (+48%): The electric cable maker powered ahead from ₹970 to ₹1,435.
Other good performers were Rail Vikas Nigam (+48%), Mazagon Dock Shipbuilders (+45%), Aegis Logistics (+44%), Tejas Networks (+43%), and Emami (+41%).
On the other side, some stocks got pummeled badly amid the uncertainty:
Sun Pharma Advanced Research Company (-38%): This pharmaceutical company’s stock price shed over a third of its value.
Aster DM Healthcare (-30%): The hospital chain’s shares declined by almost a third.
Sonata Software (-23%): The IT services provider dropped by nearly a quarter.
Now that the exit polls are out, indicating a comfortable majority for the NDA government, analysts expect the stock market euphoria to return. Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, predicts a significant rally when markets open on Monday.
“Investors will breathe a sigh of relief and jump back into banking, capital goods, auto and telecom stocks which should lead the charge”, he said. “Moreover, the latest GDP figures showing better-than-expected 8.2% growth will further boost sentiment.”
So after the recent flip-flopping, it looks like smooth sailing ahead for the Indian bourses. Election uncertainty out of the way and strong economic growth, the bulls are set to take charge once more.
