Indian Stock Market: Exit polls sentimental positive for capex stocks, says Jefferies; likes TVS, Coal India, ONGC, ACC

The Indian stock market is likely to see a sharp rally on Monday as investors cheer the exit polls that suggest the Prime Minister Narendra Modi-led government may retain power for the rare third consecutive time with a comfortable majority.

The Sensex and Nifty 50 are likely to open at record high as the Gift Nifty suggests an over 800 points gap-up opening for the index.

Also Read: Indian stock market: Analyst say ‘ache din’ to continue, here's why

The number of Lok Sabha seats that the ruling BJP-led NDA is expected to win in the General Elections 2024, as indicated by the Exit Polls, is higher than expectations. According to foreign brokerage firm Jefferies, if the actual Lok Sabha election results mirror exit polls, it will be a sentimental positive for capex stocks.

Several exit poll results declared on Saturday projected a historic third term for Prime Minister Narendra Modi. The Bhartiya Janata Party-led National Democratic Alliance is predicted to secure more than 350 seats in the Lok Sabha.

The Lok Sabha election results will be declared on June 4. 

Read here: Poll of Polls: 10 exit polls predict 350+ seats for BJP-led NDA, three 400+; INDIA bloc to get less than 200 seats

Jefferies believes the smallcap and midcap stocks (SMID) can take a breather in the new term after a rally led by election results, reports said. Moreover, the laggard largecap stocks are at a good tactical positioning, the brokerage firm said.

According to reports, Jefferies is of the view that the potential reversal of the foreign institutional investors (FII) can favour largecap stocks like private banks and Reliance Industries.

Also Read: India markets to cheer likely third term for Modi, hope for reforms

Among sectors, the foreign brokerage firm likes Real Estate, Industrials, Power from a long term perspective. Within individual stocks, it believes private financials like HDFC Bank, IndusInd Bank, Kotak Mahindra Bank trade at significant discounts. 

Jefferies likes stocks such as Eicher Motors, TVS Motor Company, Coal India, ONGC and select cement stocks like ACC and Shree Cement.

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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.