India's Nifty Futures and Asian Equities Poised for Steady Open Amid Trade Optimism and Bihar Victory

India’s Nifty futures and Asian equities are expected to open on a stable note this Monday, driven by a convergence of favorable factors. A sense of optimism surrounding India-US trade negotiations, strong earnings momentum, and the decisive electoral victory for Prime Minister Narendra Modi’s alliance in the state of Bihar are collectively supporting market sentiment. These developments have helped the Nifty index book its first weekly gain in three, ending the previous session on a firm note.

The Bihar election result, in particular, has reinforced confidence in the continuity of economic policies and populist spending, especially with key states like Tamil Nadu and West Bengal set for elections next year. Emkay Global highlighted that the Bihar election, marked by record female voter turnout following a targeted grant for women, may encourage other states to adopt similar strategies. This dynamic is likely to benefit consumption-linked sectors, as government-driven initiatives continue to shape demand.

Defense stocks remain a bright spot in the broader market. The sectoral index tracking the Nifty’s defense stocks is up 25% this year, fueled by consistent earnings and a steady flow of government contracts. Firms such as Bharat Dynamics have reported robust quarterly results, including a 76% year-over-year increase in profits and new defense contracts. These developments suggest that the government's capital expenditure in the defense space remains strong and well-directed.

Technology listings are also showing renewed momentum. Strong debuts by firms like Billionbrains Garage Ventures and Pine Labs have helped restore investor confidence in the tech IPO space. This comes amid a broader shift in investor sentiment, with a preference for firms showing clear business models and financial discipline. With several high-profile tech firms waiting in the IPO pipeline, the coming months could see a resurgence in primary market activity.

The focus for traders now shifts to macroeconomic and policy cues. With the earnings season drawing to a close, attention will be on India’s services PMI, U.S. Federal Reserve policy signals, and the trajectory of the India-US trade negotiations. Domestic inflation easing to 0.25% in October, supported by GST cuts and falling food prices, is another positive for the equity market.

As the week unfolds, a combination of political stability, strong sectoral performance, and favorable economic indicators is expected to keep the market on a firm footing. Investors will closely watch for signs of continued demand during India’s festival season, which could further reinforce the momentum in consumer-linked equities.