— The Indian stock market opened on a high note as the Sensex and Nifty reached record levels following exit polls predicting a landslide victory for the Bharatiya Janata Party (BJP) and the National Democratic Alliance (NDA) in the 2024 Lok Sabha elections. The Nifty 50 surged nearly 3% to an all-time high of 23,338.70, while the Sensex soared to 76,738.89.
“Exit poll results indicating a clear victory for the NDA with around 360 seats have alleviated the election jitters that have been weighing on markets in May,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
The bullish sentiment permeated across all major sectors, with small- and mid-cap stocks also experiencing significant gains. The exit polls, suggesting a likely two-thirds majority for the ruling party, boosted market confidence despite their historically mixed accuracy.
All 13 major sectoral indices traded in the green. Nifty Energy, Nifty PSU Bank, and Nifty Realty were the top performers, each rising 4-5%. Nifty Pharma and Nifty Healthcare saw more modest increases of 1.2%.
The total market capitalisation of all listed companies on the BSE surged by Rs 11.1 lakh crore, reaching Rs 423.21 lakh crore.
“All the exit polls indicate that the BJP will retain power, which is expected to lead to a positive reaction in the markets. However, given the election-related uncertainty, we may see a volatile session on Monday as the market reacts to the exit poll numbers and anticipates the final outcomes. Investors should be prepared for fluctuations but can remain optimistic about a potential rally if the final results align with the exit polls,” commented Dr. Ravi Singh, Senior Vice President-Retail Research at Religare Broking.
The India Volatility Index (India VIX), known as the market’s fear gauge, cooled off significantly, dropping 22% to 19.21 levels in early trading from Friday’s close of 24.6. This decline reflects investors’ diminishing concerns over election-related uncertainties.
India’s economic growth, which accelerated to 8.2% in the financial year ending March 2024, was driven by government spending on infrastructure and a booming real estate sector. These robust GDP numbers are expected to provide fundamental support to the market. Additionally, S&P’s upward revision of India’s rating outlook has further bolstered market confidence.
“After a huge gap-up opening, Nifty can find support at 23,200 followed by 23,100 and 23,000,” said Deven Mehta, Research Analyst at Choice Broking. “On the higher side, 23,650 can be an immediate resistance, followed by 23,700 and 23,800.”
Foreign institutional investors (FIIs) turned net buyers on the last day of May, purchasing Indian equities worth Rs 1,613.24 crore, while domestic institutional investors bought equities worth Rs 2,114.17 crore on the same day.
In the currency market, the Indian rupee appreciated by 42 paise to 83 against the US dollar in early trade, buoyed by the exit polls predicting a third term for Prime Minister Narendra Modi.
