BJP seat wins: While India Today-Axis My India exit poll results are still unfolding, almost all other exit polls predicted the BJP-led NDA's seat wins in the 350-400 range, which was largely similar to opinion polls released last month. A favourable market reaction is all likely on Monday, as the stock market had, over the last six weeks, trimmed expectations on BJP or NDA seat counts, following lower turnout in the first few phases of Lok Sabha elections 2024.
A Business Today Markets survey of stock analysts earlier suggested the stock market was pricing in 300-320 seats for NDA and that the Phalodi Satta Bazar reportedly suggested 300 seat wins for NDA. The exit polls results, thus, are far better than those expectations.
"Markets should react very positively. A 350-plus seat win on the Judgement Day would be a very strong number. I would say Nifty would be able to sustain the level of 22,500. From here onwards, there would only be upside, not downside. The Nifty level of 22,500 would be the base," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.
On Narendra Modi, Bathini said an incumbent Prime Minister coming back to power for the third time is rare in a country like India, as he felt such an outcome would be 'historical'.
"350-400 seats was what the market was originally expecting for NDA, which is why the market looked strong initially. But there were noises recently suggesting the NDA seat count could come closer to 300 and that is why there were some jitters. But in the last two days, the feeling was like that's not the case. The exit poll projects suggest things will be better for markets in the coming week," said Amar Ambani of YES Securities.
Ambani said once the clarity is there, FPIs who does not understand the political situation and tend to follow the global press -- that is not always apt in opinion or rather focus on other aspects, could soon bring in dollars into domestic equities.
"Absolutely, the market would surely welcome the exit poll numbers on Monday. Maybe, we may see a little bit of nervousness because 400-plus was what spoken about by the Prime Minister Narendra Modi and the BJP-led alliance. Now, we will have to wait for the actual numbers on June 4," said Gaurang Shah of Geojit Financial Services.
Jan Ki Baat sees NDA wins at 377. India News D-Dynamics sees NDA wins at 371, Republic Bharat-Matrize at 353-368, Republic TV - P MARQ at 359 and TV 5 Telgu at 359 seats.
"Exit polls & final election results happen every five years. These are events which create near-term volatility, but markets are mature enough to shrug them off and move on. Finally, fundamentals & earnings growth of the companies will continue to determine market trends," said Aniruddha Naha, CIO - Alternatives, PGIM India AMC. Opinion polls had earlier suggested 370-410 seats for the BJP-led NDA. India TV-CNX earlier suggested 399 seats for NDA, ABP News-CVoter 373, ZEE News 390, News18 411, with the average expected seat wins for the four opinion poll at 393.
But lower voter turnout hit market sentiment. The sentiment improved only after Union home minister Amit Shah and Prime Minister Narendra Modi in separate television interviews hoped for a strong mandate. Ahead of the seventh phase of polling, FM Nirmala Sitharaman also recently told a TV channel that a mandate for BJP can send stocks in a 'solid bull's market'.
The prospects of unobstructed functioning of the parliament in the 3rd term of Modi Govt is expected to deliver many progressive reforms in India, said of Deven Choksey of DRChoksey FinServ.
"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," he said.
On June 4, said Arvinder Singh Nanda of Master Capital Service, one cannot rule out the possibility of profit booking in the second half of the trading session following an initial upward movement.
"Historical trends from the previous two election outcomes in 2014 and 2019 have shown similar patterns, where the market closed with minimal change after experiencing significant volatility during the early trading hours. From a technical perspective, the 22,400 level, near the 50-day EMA, is critical on the downside, while the 23,400 level will be crucial on the higher side," he said.