Sensex, Nifty race over 3% to record highs as exit polls predict massive win for BJP-led NDA

Bengaluru: India’s benchmark indices, on Monday, turned in their best intra-day gains in 40 months and rose to lifetime highs, following across-the-board buying as exit polls predicted a massive win for the incumbent Narendra Modi government, signaling policy continuity and business-friendly reforms.

The 30-share BSE Sensex soared by 3.39% to settle at a new closing peak of 76,468.78 points, while the 50-share NSE Nifty climbed 3.25% to finish at 23,263.90.

Among the biggest gainers were shares of state-owned companies, banks and firms who are seen to have benefited most from the policies of the Modi government.

Blue-chip stocks like Reliance Industries, ICICI Bank, HDFC Bank and State Bank of India saw a jump. Shares of all Adani Group companies continued their rally on Monday, taking their combined market valuation to Rs 19.42 lakh crore. Adani Power surged nearly 16%, Adani Ports by 10% and flagship Adani Enterprises by over 6%.

Strong GDP data also added to the buoyancy in equity markets. India’s GDP grew by 8.2% in FY2023-24, beating forecasts, official data showed last Friday.

"Exit poll has activated the optimism of a memorable win for the ongoing government, PSUs had a humongous rally in anticipation of continuation of the reform gains. Strong economic data like GDP growth, 100-days measures list and final budget will be the key points market will observe in the coming weeks," said Vinod Nair, Head of Research, Geojit Financial Services.

Exit polls on Saturday predicted that Prime Minister Narendra Modi will retain power for the third straight term, with the BJP-led NDA expected to win a big majority in the Lok Sabha polls. The counting of votes will take place on June 4.

“Equity markets jumped in-line with expectations of a development-driven agenda, with the Nifty scaling a new record high. Additionally, the India Volatility Index, which had risen significantly in the past month, has cooled down post the exit poll numbers,” said Pranav Haridasan, Managing Director and Chief Executive Officer at Axis Securities.

“If the actual election results align with what exit polls are suggesting, it is expected that India will experience a period of political stability, clear policy direction and ongoing impetus on infrastructure and capex investments,” Haridasan said, adding that the markets are expected to remain bullish.

Among the Sensex companies, NTPC, State Bank of India and Power Grid jumped over 9% each. Larsen & Toubro, Axis Bank, UltraTech Cement, Mahindra & Mahindra, IndusInd Bank, and Tata Steel were the other big gainers.

In the broader market, the BSE midcap gauge climbed 3.54% and smallcap index jumped 2.05%, with both hitting their all-time peaks in intra-day. The market capitalisation of BSE-listed companies jumped to $5.13 trillion, while that of NSE-listed companies stood at $5.09 trillion.

“In the short term, investors should maintain caution and consider hedging, while a mid-term strategy should focus on a diversified portfolio, quality investments, and monitoring economic indicators to adapt to fiscal and monetary policy changes,” said Suman Bannerjee, Chief Investment Officer, Hedonova.

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