The stock market reached record highs as exit polls hinted at a landslide victory for the BJP in the elections. The Nifty 50 and Sensex hit all-time highs of 23,338.70 and 76,738.89, respectively. This news relieved investors’ worries, leading to gains across major sectors, including small and mid-caps.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that the polls indicated a potential two-thirds majority for the ruling party, boosting market sentiment despite the historically mixed accuracy of exit polls.
Market Update: Sensex Reaches 2,600 pts to Record High and Positive Sentiment
Stock Indices Soar: The BSE Sensex jumped by 2,178 points to reach 76,139, while the Nifty 50 surged by 579 points to 23,109.
Exit Polls Favor BJP: Most exit polls predict a BJP victory in the upcoming Lok Sabha election, with an average suggesting around 374 seats for the NDA.
Market Capitalization Rises: The total market value of BSE-listed companies increased by Rs 11.96 lakh crore to Rs 424.08 lakh crore.
Sector-Wise Growth: Several sectors witnessed significant gains, including PSU Banks, Oil and gas, Financial Services, Metal, Real Estate, and Auto, with increases ranging from 3% to 5%.
All 13 major sectoral indices showed positive growth, with Nifty Energy, PSU Bank, and Realty leading the pack with 4-5% gains.
Diverse Performance: While most sectors flourished, Nifty Pharma and Nifty Healthcare saw modest gains of 1.2% each.
Overall, the BSE market capitalization rose by Rs 11.1 lakh crore to Rs 423.21 lakh crore, indicating continued market expansion.
Market Momentum and Economic Strength
Exit polls indicating a likely BJP victory are poised to elicit a positive market response, though Monday’s trading may see volatility as investors await final results. Dr. Ravi Singh advises investors to brace for fluctuations while hoping for a potential rally if the outcomes align with exit poll projections. India’s economy demonstrated resilience, with GDP growth reaching 8.2% in the fiscal year ending March 2024, buoyed by government infrastructure spending and a thriving real estate sector.
This robust growth, surpassing expectations, provides fundamental support to the market alongside S&P’s upbeat revision of India’s rating outlook. Analysts anticipate that if BJP secures a strong mandate, Prime Minister Modi could leverage political capital to push through ambitious land and labor reforms, further bolstering market sentiment.
Market and Economic Highlights
Investors expect the Modi government to continue turning India into a manufacturing hub, attracting companies like Apple and Tesla.
- Global markets showed a positive trend: MSCI’s Asia-Pacific index outside Japan rose 1.4%, Chinese blue chips increased by 0.3%, Japan’s Nikkei went up 1.1%, and South Korea gained 1.8%. In Europe, EUROSTOXX 50 futures climbed 0.9%, and FTSE futures rose 0.7%.
- Oil Prices: Oil prices remained stable as investors considered OPEC+’s decision to extend production cuts into 2025. Brent futures for August fell slightly to $81.07 a barrel, and U.S. WTI crude for July dipped to $76.98.
- Investor Activity: On May 31, foreign institutional investors bought Indian equities worth Rs 1,613.24 crore, and domestic institutional investors purchased Rs 2,114.17 crore worth of equities.
- Rupee Strength: The Indian rupee strengthened by 42 paise to 83 against the US dollar after exit polls suggested a third term for Prime Minister Modi.
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