With the exit polls forecasting NDA victory on the backdrop of strong GDP data, the market sentiments are expected to be at an all-time high and the benchmark indices are bound for a massive rally on Monday.
Besides the exit poll and GDP data pushing the market up on Monday, the remaining week will see two major events: The vote counting and RBI interest rate decision. The average of 12 exit polls shows that the NDA is likely to claim victory in around 366 seats, which is way ahead of the 272 mark. With a stable government coming up, the markets will expect continuation of existing policies, raising confidence of investors.
The votes will be counted on Tuesday and if the final results reflect the exit poll outcome, we can expect a market rally on Wednesday as well.
Santosh Meena, Head of Research, Swastika Investmart Ltd, told PTI, “The market is approaching the event with caution, and the positive surprise from exit polls can lead to a rally as majority of the exit polls are giving 350+ seats to the NDA. Conversely, a negative surprise from actual results might trigger a knee-jerk reaction in the market.”
The RBI policy announcement is scheduled for Friday, June 7. “A key aspect to monitor will be the behaviour of foreign investors in the aftermath of the election results. On the global front, macroeconomic data from the US and China will also play a significant role in shaping market sentiments,” Meena added.
Manufacturing and services PMI data for May are scheduled to be announced during the week. "Exit polls results, which indicate clear victory for the NDA with around 360 seats completely removes the so-called election jitters which have been weighing on markets in May. This comes as a shot in the arm for the bulls who will trigger a big rally in the market on Monday," said V.K. Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
He added that the 8.2 per cent GDP growth recorded for FY24 is better than expected and will further embolden the bulls on Monday.
An Emkay Research report said if the final outcome is in line with exit polls, it will be “good for risk assets in the immediate run and macro stability in the medium term."
The previous time the stock market indices reached all-time high was on May 27, when the Sensex struck 76,009.68 and the Nifty also touched a record 23,110.80. Let's wait and watch this week if the stock market will rally further to hit a new lifetime peak.
