With decisive win of BJP in 4 state elections, stock markets in India are going to be very joyful for at least couple of days if not couple of weeks on the hopes of them forming the govt in center after national election in 2014.
This coupled with the fact that Power grid FPO received tremendously positive response from retail investors also provides lot of comfort in the rally. Any further leg to the upward movement in Sensex or nifty have to be supported by retail investors which seems to been reappearing since past couple of months. Mid and small cap stocks with low ticker price will surely get active in coming months if market stays comfortable at higher levels.
Given the fact that Powergrid FPO sucked in more than 40000 crores from the market which was largely the money pulled from secondary market, once the FPO shares are listed around 3rd week of December the additional 35000 crores, which were blocked in the FPO, will get reinvested in secondary market which could propel the markets even higher.
Sectors that might outperform:
1. Infrastructure specially power and road.
2. Capital goods.
3. Public sector banks - on the hopes of better economic cycles and very low valuations.
Sectors that might not participate or underperform: