Bulls to reign on D-Street after exit polls predict 350+ for BJP; Experts peg Nifty upside at 23,400+ for June 3

  • Exit polls indicated a clear victory for the NDA with around 360 seats, which is likely to remove election-related jitters among investors, said analysts

Nikita Prasad
Published1 Jun 2024, 09:07 PM IST
Nifty 50 may hit 23,400 or more on June 3 after exit polls project a clear majority for BJP in Lok Sabha polls 2024
Nifty 50 may hit 23,400 or more on June 3 after exit polls project a clear majority for BJP in Lok Sabha polls 2024

Bulls are likely to tighten their grip on D-Street in the next market session on Monday, June 3, after most of the exit polls predicted on Saturday that the Bharatiya Janata Party (BJP)-led NDA may win over 350 of the 543 seats in the Lok Sabha polls. Market analysts are bullish on Nifty 50's upcoming rally and said BJP's clear victory, as predicted by exit polls, is likely to remove election-related jitters among investors.

"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 Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Follow Exit Polls 2024 Live Updates: BJP-NDA to cross 350 in LS polls; PM Modi calls INDIA bloc 'opportunistic'

Here's what exit polls predict for June 4

Several exit polls showed a massive win for the BJP in Karnataka, the state it lost to the Congress just few months back. Meanwhile, India TV-CNX poll said the Chandrababu Naidu-led TDP and the NDA is likely to sweep Andhra Pradesh polls.

An exit poll is a post-election survey which tends to predict the mood of the nation. It's an opinion poll showing how many seats a political party will likely win. It must be noted that exit polls are not same as the official elections results. The official Lok Sabha Election Results 2024 will be declared on June 4 by the Election Commission of India.

Most of the exit polls projected the ruling National Democratic Alliance (NDA) could win a two-thirds majority in the 543-member lower house of the parliament, where 272 is needed for a simple majority. 

A two-thirds majority will allow the government to introduce far-reaching amendments to the Constitution. The opposition "INDIA" alliance led by Rahul Gandhi's Congress party was projected to win between 125 to 165 seats.

Also Read: Nifty 50 June series: From Bata India to IGL—4 stocks where investors can park their money; do you own?

The NDA won 353 seats in the 2019 general election, while the BJP accounted for 303. In his first comments after the voting phases ended, PM Narendra Modi expressed confidence in his party's victory on June 4, when the final counting figures will provide the conclusive election results.

"I can say with confidence that the people of India have voted in record numbers to re-elect the NDA government," he said in a post on microblogging platform X, without providing evidence of his claim. "The opportunistic INDIA alliance failed to strike a chord with the voters. They are casteist, communal and corrupt,'' added PM Modi.

Lok Sabha elections are considered one of the most consequential in India’s history. If BJP's Narendra Modi wins, he will be only the second leader to retain power for a third term after Jawaharlal Nehru, the country’s first prime minister.

‘’The estimates of exit poll suggest a solid win for the NDA, surpassing the 350+mark and with better traction for the BJP in skeptical states like Maharastra and southern India. While final outcome may diverge from exit polls, a political continuity is likely to be good for risk assets in the immediate run and macro stability for the medium term,'' said Madhavi Arora- Lead Economist, Emkay Global Financial Services.

How will stock markets respond to exit polls on June 3?

Most market analysts expressed confidence of a broader bull run in the upcoming session over the exit polls predictions and also driven by strong macroeconomic fundamentals after government data revealed on Friday that India has retained its crown as the world's fastest-growing major economy.

India's gross domestic product (GDP) for the January-March quarter of fiscal 2023-24 (Q4FY24) came in at 7.8 per cent, driven by strong growth in the manufacturing sector. The Indian economy beat D-Street estimates and grew by 8.2 per cent for the full year (FY24). 

Economists expect reform-driven targeted expenditure agendas to continue from the policy stand point. Healthy macro balance sheet of all economic agents of India augurs well for a higher trend growth path, according to experts.

Also Read: India Q4 GDP Data Highlights: FY24 growth hits 8.2%; ‘'Just a trailer of things to come,'' says PM Modi

Largecaps in financials, capital goods, automobiles and telecom are likely to lead the rally on Monday, June 3. The bulls will be further emboldened by the better-than-expected 8.2 per cent growth in GDP numbers which came after market hours on Friday. Technically and fundamentally the market is poised for a rally,'' said Geojit's Dr. V K Vijayakumar.

According to Divam Sharma, Founder and Fund Manager at Green Portfolio, markets would love it as an initial reaction if these exit polls come to reality on Monday. ‘’Although a good run up should be used as an opportunity to book profits as we believe that over days we could see some profit booking on “buy the rumor and sell the news,'' said Sharma.

Also Read: Expert View | OPEC to extend supply curbs till 2H; Crude oil seen at $70-$90 in 2024: Kotak's Kaynat Chainwala

Nifty 50 eyes 23,400+ on likely BJP-win?

Analysts still say that as election results approach nearer, Sensex and Nifty indices are likely to witness heightened volatility. Even as the overall sentiment of the market is bullish, any correctional fall may accompanied by fresh buying. Historically, market sentiment ahead of election results are influenced by factors such as political stability, and economic policies of the leading party

On June 4, the frontline indices could experience substantial movements, with both high and declines remaining on the cards. The market is currently trading at a premium, having largely discounted the growing likelihood of the continuation of the Modi era, said analysts.

‘’Consequently, we cannot rule out the possibility of profit booking in the second half of the trading session following an initial upward movement,'' said Arvinder Singh Nanda, Senior Vice President at Master Capital Services Ltd.

‘’Historical trends from the previous two election outcomes in 2014 and 2019 have shown similar patterns, where the market closed with minimal change after experiencing significant volatility during the early trading hours. Technically, the 22,400 level, near the 50-day EMA, is critical on the downside, while the 23,400 level will be crucial on the higher side,'' added Nanda.

Emkay's Madhavi Arora added that once the election event risk is over, all eyes would be on the budget in July, which could continue with the consolidation process while improving the budget internals. ‘’We see twin deficit to further improve ahead, which limits external shocks to India further via financial channels in case the global cycle turns averse,'' said Arora.

Also Read: Lok Sabha Elections 2024 Trading Strategy: Analysts predict Nifty to shine above 23,000; Here's how to trade on June 4

Technical View

‘’After touching 23,110 levels, the Nifty index experienced a volatile week, with a weakening bias and the index currently precariously placed near the significant 50EMA zone at approximately 22,380 levels. The index needs a decisive move past the 22,700 zone to improve the bias. With the election outcome approaching, high volatility and fluctuations are expected in the coming days,'' said Vikram Kasat, Head - Advisory, Prabhudas Lilladher

The Bank Nifty is better positioned compared to the Nifty index, maintaining above the important 50EMA level of 48,000-48,300. A decisive breach above 49,000 levels is necessary to improve the bias, while 47,200 levels would be a crucial support zone for the index, according to the analyst.

Sensex shows support at 73,400 and resistance at 74,400 levels. The major laggards were Metals, IT, Pharma, Energy, and FMCG sectors. ‘’Our focus will be on the Auto sector as May vehicle sales are announced. We expect the auto counter to show flat to slightly positive sales numbers. FII long-short ratios are at extreme lows of 13 per cent and 87 per cent, suggesting a potential turnaround event soon, indicating a possible short covering rally,'' said Kasat.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.

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First Published:1 Jun 2024, 09:07 PM IST
Business NewsMarketsStock MarketsBulls to reign on D-Street after exit polls predict 350+ for BJP; Experts peg Nifty upside at 23,400+ for June 3

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