Election results, BJP seat wins: Gift Nifty up 165 points; is Nifty50 headed towards 24,000 level?

Ahead of Lok Sabha elections results 2024, Nifty futures on the Nifty International Exchange traded 165 points, or 0.71 per cent, higher at 23,573, hinting at a start at new all-time high for the domestic market on Tuesday. The market participants will be keenly looking at if prime minister Narendra Modi is getting a landslide victory for his third term or not.
 

Following a more than 3 per cent rally in both the headline indices- BSE Sensex and Nifty50 Index- the initial indicators hit at another gap up opening for the headline indices. However, intense volatility can not be ruled out at Dalal Street for the day if the actual results fall short of expectations of the street.
 

India VIX cooled down 15 per cent. PSU Banks, Infra, Realty, Energy and Oil & Gas rallied 5-8 per cent each. NDA 3.0 augurs well for the economy and markets as it provides stability and continuity in policy-making with a single-party majority government, pushing its economic growth agenda, said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services.
 

"Markets heaved a sigh of relief, and after witnessing sharp volatility over the last two months, it can now go back to fundamentals. We expect the market to reach new highs given the clear majority for the ruling party in exit polls, good macro trends, and solid corporate earnings," Khemka added, picking  manufacturing, capex, infrastructure and financials as key themes for the long-run.
 

As expected, the Nifty50 moved up sharply after the exit polls, but some investors - especially FPIs - are still waiting for the final results before they act, said Pratik Gupta, CEO & Co-Head, Kotak Institutional Equities. "If the actual election result is in-line with the exit polls’ predictions, there is further upside in the short term," he said.
 

According to technical analysts, daily and hourly momentum indicators have a positive crossover which is a buy signal for the trader. Thus, both price and momentum indicators suggest continuation of the rally. They see Nifty50 extending gains to new record highs on the back of short covering by FIIs, if the elections fall in-line with the estimates.
 

On the daily charts we can observe that the Nifty has broken above the previous swing high of 23,110 suggesting the start of a next leg of up move which can extend till 23,500-23,740 from short term perspective, said Jatin Gedia, Technical Research Analyst at Sharekhan. "The psychological level of 23,000 shall act as a key support from a short term perspective," he said.
 

"Bank Nifty also hit a new all-time high and we expect the positive momentum to continue. Our short-term target of 51,000 has been achieved. The next target is placed at 53,960–54,000 zones as per the Fibonacci extension method. The level of 50,000 shall act as a crucial support from short term perspective," Gedia adds.
 

The official election results are awaited which may lead to volatility, said Ajit Mishra, SVP of Research, Religare Broking. The index has established a base in the 22,600-22,800 range, and a decisive close above 23,400 could drive it towards the 24,000 mark, he said, suggesting traders to be careful in stock selection and effective risk management.
 

Markets gave a thumbs up to the exit polls and Nifty started the week at a new record high with a significant gap up, said Ruchit Jain, Lead Research, 5Paisa.com. "The benchmark rallied higher along with the broader markets and the Nifty ended the day above 23,300," he said.
 

For Nifty, Jain sees support at 23,130-22,950 levels, while the levels of resistance shall be 23,510-23,700. Nifty Bank's support zone is at 50,430-49,800, while resistance will be 51,450-51,800. For Sensex, Jain sees support at 75,850-75,230 and resistance levels are pegged at 76,900-77,350.