Sensex rises more than 3.5%, as Nifty surpasses 23,300: Following the conclusion of the Lok Sabha elections, exit polls indicated that Prime Minister Narendra Modi would win a hat-trick. This led to the opening of domestic equities indices at record highs on Monday. Analysts noted that the market was also encouraged by S&P’s upward adjustment of India’s rating outlook from stable to positive and the country’s better-than-expected 8.2 percent GDP for FY24.
On Monday, the BSE Sensex crossed the 76,500 threshold for the first time. At opening, the 30-share index was up 2,621.98 points, or 3.55%, at 76,583.29. At the opening, the Nifty was up 807.2 points, or 3.58%, to a record high of 23.337.9.
The National Democratic Alliance (NDA), led by the Bharatiya Janata Party (BJP), is predicted by an average of ten exit polls to surpass its 2019 total of over 350 seats. The estimations indicate that the opposing INDIA alliance will have between 107 and 201 seats.
“Exit polls show that the NDA/BJP won handily in the Indian Parliamentary Elections. Seshadri Sen, Head of Research and Strategist at Emkay Global Financial Services, stated, “We see near-certainty of a third term for the Narendra Modi government with a simple majority for the BJP on its own (the numbers may change in the final result).” Survey findings are not the same as actual results.
The multi-year bull run in Indian equities could continue because to the macrofinancial stability and the emphasis on capex, investments, and manufacturing, according to Sen.
Experts in the market stated that a number of investor classes have taken short positions in the market, and that the market is now seeing investors cover those positions after exit polls indicated that the ruling BJP will win. Some investors took short positions because they expected the BJP might not form a government on its own and might need to form an alliance. Meanwhile, FPIs with long positions in the markets had taken some short positions to protect themselves in the event of an unfavorable poll result, the said.
It is uncommon for feelings, technicals, and fundamentals to all turn positive at the same moment in the market. That’s what has transpired thus far. With the Nifty down 600 points from its May highs, the market was extremely light heading into the major event—the elections,” according to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Large-scale profit booking also took place. There is also a high short position in the market. These will all undergo significant alteration. Retail, HNIs, and DIIs will all become purchasers. He stated, “Short-covering can increase the momentum.”
The Indian equity market has seen a little uptick in volatility over the last month, according to a Kotak Institutional Equities research. However, India’s VIX is still lower than it was before prior elections, indicating that market participants are less concerned about the outcome of the election.
India VIX was trading around 20.22 in the early morning hours, down from the previous close of 24.6.
On Monday, a few of the main indexes also started the day high. At 14,951.85, Nifty Midcap opened 3.52 percent higher. The Nifty Bank achieved its first level crossing of 50,000. At 50,889.85, it opened 1905 up over 4%.
Foreign portfolio investors (FPIs) and domestic institutional investors (DIIs), who net sold Rs 23,364 crore of Indian stocks in May, are seen as major buyers by market players.
“FPI cannot remain neutral when domestic institutional investors are making purchases. Going forward, we anticipate significant FPI inflows,” a broker stated.
NTPC Ltd., Power Grid Corporation of India, Adani Ports, and Adani Enterprises are the NSE companies that had the most gains in morning transactions.
