Bihar Election Verdict Lifts Market Mood, Analysts Expect Strong Positive Reaction As NDA’s Win Boosts Stability At Centre

Mumbai: The NDA’s decisive return to power in the Bihar assembly elections is expected to trigger a strong positive reaction in the Indian stock markets, with analysts highlighting improved political stability for the coalition at the Centre. Market experts said the scale of the mandate has reinforced confidence in the ruling alliance and is likely to support bullish sentiment in the near term.

JM Financial Institutional Securities noted that unlike in previous years, the final results closely matched the exit poll projections—but with an even stronger mandate in favour of the NDA. The firm highlighted that the newly introduced women-centric cash transfer scheme played a significant role in driving higher turnout among women voters, influencing the electoral outcome.

Analysts added that the breadth of the vote shift away from the opposition, particularly the RJD and Congress, underscores the political appeal of the BJP and its partners. This strengthening of political stability, they said, tends to serve as a positive signal for markets, especially at a time when investors are closely tracking macroeconomic cues.

Equity markets had already ended the previous week on a strong footing, buoyed by the resolution of the U.S. government shutdown, robust domestic fundamentals, better-than-expected Q2 corporate earnings, and easing inflation. The NDA’s victory in Bihar further boosted investor confidence, lifting political sentiment and risk appetite.

During the week, markets staged a notable recovery after a brief period of weakness. Benchmark indices closed firmly in the green, supported by favourable economic indicators. 

Both indices registered gains of over one and a half percent, with the Nifty ending at 25,910.05 and the Sensex finishing at 84,562.78.

Investor sentiment was further strengthened by a sharp decline in India’s retail inflation, which fell to 0.25 percent in October from 1.44 percent in September. Wholesale inflation also dropped into negative territory at –1.21 percent, helped by lower crude oil and non-food commodity prices. These supportive macroeconomic signals, combined with political clarity from the Bihar results, are expected to sustain market optimism.