Along with exit polls, market will also react to domestic GDP data along with US core PCE data which will result further heighten the volatility on Monday. Overall the global cues have been weak as the hopes of rate cut are getting diminished with better than expected US economic data releases.
Also read: India markets to cheer likely third term for Modi, hope for reforms
“Monday morning markets would celebrate the EXITPOLL numbers and open with a gap-up strength. The gap up would be on the back of exit poll reports suggesting BJP can comfortably get 350++ seats pushing the Nifty to look to move-up for new lifetime highs. Now at this juncture, we should focus on the next 5 years plan which is more important than the next 2-3 days. Election results will pass on with flying colours and focus will now shift towards Capex, Govt spending, valuations and earnings growth,” said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.
During the week, the equity market shown some anxiety and nervousness around the impending political uncertainty, which resulted in a sharp rise in volatility in April and May.
Until Thursday, frontline indices experienced a continuous decline over five sessions, resulting in a 2.4 percent drop from their recent peak earlier in the week. This decline occurred amidst considerable volatility preceding the release of poll results. For the week, the Sensex plummeted by 1,449 points and the Nifty dropped by 426 points, marking their first weekly decrease in three weeks. Traders adjusted their positions in anticipation of exit poll outcomes and final results.
Also read: India stocks, bonds set to gain as polls show landslide Modi win
Where’s market headed on June 3?
In general, analysts anticipate the Nifty 50 to ascend towards the range of 23,000-23,400. Conversely, they suggest that the index could hold around 22,400 on the downside.
While they foresee a gradual upward trend, the market might experience fluctuations this week due to the RBI monetary policy. Therefore, experts advise traders to monitor leveraged positions closely and await further clarity.
“This comes as a shot in the arm for the bulls who will trigger a big rally in the market on Monday. Largecaps in financials, capital goods, automobiles and telecom are likely to lead the rally. The bulls will be further emboldened by the better-than-expected 8.2% growth in GDP numbers which came after market hours on Friday. Technically and fundamentally the market is poised for a rally,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
According to Gary Dugan, chief investment officer at Dalma Capital Management Ltd. in Dubai, as quoted by Bloomberg, investors can expect 3-5% return from the market on Monday.
“The suggested size of the majority would allow the government to continue unabated with its current policy program. We could imagine a 3-5% return from the market on Monday,” Dugan said.
Prashanth Tapse of Mehta Equities further said, “Technically markets would trade highly volatile with high VIX index, holding markets above 22400 levels would keep us in a positive zone with possible upside towards 22800-23000 levels in coming days. Close above 23111 would be highly watched.”
What’s next after election results?
According to Tapse, after formation of the new government along with new cabinet, the Street will start moving towards the next Full Union Budget which will place the growth of India for next 5 years which would eventually elevate corporate earnings.
“The Next 100 days of the newly formed Govt will be a very important time to watch. The combined market capitalisation of companies listed market valuation 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, POWER, DEFENCE, RAILWAYS, CAPEX DRIVEN SECTORS,” he added.
You are on Mint! India’s #1 news destination (Source: Press Gazette). To learn more about our business coverage and market insights Click Here!
Download The Mint News App to get Daily Market Updates.
Published: 02 Jun 2024, 03:55 PM IST
