Bengal Stocks Surge on BJP Win, But Experts Say the Rally Won't Last Long

Shares of companies with major operations in West Bengal surged up to 10% on Monday as early election trends pointed to a historic victory for the Bharatiya Janata Party in the state, ending 15 years of Trinamool Congress rule.

As per Election Commission of India data at around 3:54 PM, the BJP was leading in 194 seats while the Trinamool Congress was ahead in 88. The BJP had already won four constituencies outright, while the TMC had won just one.

The sharp swing sent investors rushing toward stocks tied to West Bengal's economy. CESC and Bandhan Bank hit fresh 52-week highs of ₹204.40 and ₹212.55 respectively on Monday. Shriram Properties climbed 11.3% to ₹94, Senco Gold rose over 10%, and Emami gained nearly 4%. Shares of Baazar Style Retail and Andrew Yule also moved higher on the day.

Why These Stocks

Shriram Properties was the standout gainer, driven by its flagship project, Shriram Grand City in Uttarpara, a 314-acre integrated township positioned as a sister city to Kolkata.

Baazar Style Retail's rise was linked to the BJP's electoral promises, which include a ₹3,000 monthly aid for women and unemployed youth, implementation of the 7th Pay Commission for state staff, and the creation of one crore jobs.

Kolkata headquartered company Berger Paints' MD and CEO Abhijit Roy told CNBC-TV18 that he expects more development and economic progress in West Bengal going forward, adding that he is hopeful conditions in the state will improve.

However, not everyone is convinced the rally has legs. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, cautioned that Monday's market action may be unduly influenced by the state election results and that the sentiment boost would likely be short-lived. He noted that the real market trend would be driven by crude oil prices, which in turn would be shaped by developments in West Asia.