The exit polls indicate a clear win for the BJP led NDA in the upcoming Lok Sabha election results on June 4. According to most exit polls, the NDA is set to garner over 350 seats in the 48-day long 7-phase polling. So what does it mean for the markets? As it is well borne out, the markets are tantalisingly poised with the possibility of a sharp and swift upmove.
According to SP Tulsian, CEO & Editor sptulsian.com, “It is a unanimous and undisputed fact that market will give a thumping support with a 7-gun salute on Monday while a 21-gun salute is expected during the week. Landscape of the market now seen turned positive for at least 3 years, with a hope that huge global capital will be seen coming in.”
Deven Choksey, managing director of DRChoksey FinServ pointed out that, “The prospects of unobstructed functioning of the parliament in the 3rd term of Modi Govt is expected to deliver many progressive reforms in India.
Politically, this majority for BJP and NDA also marks the end of un-united opposition. The period to 2029 will see an exit of 2 generations of opposition leaders.
Economically, India will grow much faster now; also under the brighter prospects of reforms like CBDC, ONDC and de-dollarisation of payments for global trade by India.”
Strong macro-economic factors support rally
Along with the thumping majority that’s indicated by the exit polls, the robust Q4 GDP numbers are also set to add to positive sentiment on the street. Kishor Ostwal, CMD, CNI Research pointed out that the key factors that will support markets on Monday morning include,
“1 ) Clear mandate seems in favour of NDA as per all exit polls
2) Fantastic GDP numbers for Q4
3) 0.2 % reduction in fiscal deficit
4) Dow closing up 574 points
5) Arrival of monsoon
6) FPIs are short at 3 lakh contracts at life high; which if they start cutting Nifty will rise 1000 to 1500 points.”
It is important to note that the DIIs have bought stocks for Rs 53,618 crores in the cash market so far this month. This is around Rs 10000 crores more than the FII selling. The DIIs have enough funds to buy aggressively if the situation turns favourable.
Markets poised for a rally
“Market is and will be excited as the reforms will produce predictable earning growth for India Inc. India is likely to attract premium dollar in the journey to $12 trillion economy by 2035.
The Nifty has already corrected around 600 points from its May highs and the upswing is likely to be led by capital goods, financials, autos, and telecom,” added Choksey.
V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services reiterated the same point and said that the “Exit polls results which indicate clear victory for the NDA with around 360 seats completely removes the so called election jitters which have been weighing on markets in May. This comes as a shot in the arm for the bulls who will trigger a big rally in the market on Monday. Largecaps in financials, capital goods, automobiles and telecom are likely to lead the rally. The bulls will be further emboldened by the better-than-expected 8.2% growth in GDP numbers which came after market hours on Friday. Technically and fundamentally the market is poised for a rally.