Exit poll results, BJP seat wins: Gift Nifty up 800 pts, Nifty may open at record high; stocks and sectors to watch today

Nifty futures on the Nifty International Exchange traded 805 points, or 3.55 per cent, higher at 23,493, hinting at a start at new all-time high for the domestic market on Monday after the exit polls results indicating a landslide victory for the BJP led NDA alliance and Narendra Modi getting a third term as the prime minister of India.
 

All the exit polls suggest a clear and comfortable mandate for the BJP-led alliance, with an average estimate of more than 350 plus seats for the incumbent government. The brokerage firms and market analysts see this win as a major booster for the Indian economy and stock markets in terms of political stability and policy continuity.
 

Market participants see a short covering from the overseas investors at index levels. This narrow election theme-based rally may end in June-July, said a CLSA's recent report, released before exit polls.
 

FIIs are net short by $2,838 million and have added $58 million shorts, said Nuvama Institution Equities. They have added net shorts to the tune of $2,725 million in the last 5 days. On the other hand, the brokerage said that overseas investors are net long by $4,727 million and have added $626 million longs, adding net longs of $1,403 million in the last five days.
 

Nifty 50 index has seen long unwinding [(1.4 per cent)/(10.1 per cent)] (Px Chg/OI Chg). The current month futures are trading at a premium of 170 points / 75bps. The current OI value is Rs 355 billion, said a report from Nuvama. "Nifty Bank has an OI reduction of 6.5 per cent, indicating short covering," it added.
 

Nifty managed to hold the support zone at the clusters of the 50-DMA and 20-DMA on the technical charts, said Santosh Meena, Head of Research, Swastika Investmart. "The immediate resistance zone lies between 23,000 and 23,100, with subsequent target levels at 23,300, 23,500, and 24,000," he said. If Nifty slips below the 22,400 level, the next support levels to watch are 22,200, 22,000, and 21,700, Meena added.
 

Brokerage firms continue to remain positive on PSUs, railways, infrastructure and defense stocks along with auto, real estate and other consumption driven counters. They also believe that stocks related to water infra will also be benefitted in the long run as the government's focus on its existing policies continue.
 

The victory of BJP augurs well for the economy and capital markets as it provides stability and continuity in policymaking with a single-party majority government, with a continued push to economic agenda. Equity markets displayed some anxiety and nervousness recently around the impending political uncertainty, which resulted in a sharp rise in volatility, said Motilal Oswal.
 

Our model portfolio remains aligned with the key domestic cyclical themes amid a consistent backdrop of earnings growth. We remain overweight on financials, consumption, industrials and real estate, it said. "Industrials, consumer Discretionary, real estate and PSU Banks are our key preferred investment themes."
 

The Next 100 days of the newly formed Government will be a very important time to watch, said Prashanth Tapse, Senior VP (Research), Mehta Equities.
 

"The combined market capitalisation of listed-companies swell by $1 trillion in just six months can a similar type of magic can be repeated targeting India market-cap to double to $10 trillion in next 4-5 years with sector to focus including PSU stocks, power, defence, railways and capital expenditure driven sectors," Tapse added.
 

From the largecap space Motilal Oswal has picked ICICI Bank, SBI, L&T, Coal India, M&M, Adani Ports, ABB India, HPCL, and Hindalco, while it prefers Indian Hotels, Godrej Properties, Global Health, KEI Industries, PNB Housing, Cello World, and Kirloskar Oil from the midcap pack.
 

According to Arpit Jain, Joint MD at Arihant Capital Markets stocks pertaining to water treatment and infra such as Welspun Corp, Apollo Pipes, Tata Metaliks, Prince Pipes, Vatech Wabag, Finolex Pipes, Jain Irrigation, Astral, PVRPL, EMS, and Electrosteel Casting are well-positioned to gain from the 'Nal Se Jal' scheme with momentum to continue in them for 2-3 years.