Nifty, Sensex Log Best Session In Over Three Years As Polls Predict Modi 3.0: Market Wrap

India's key equity indices logged their best session in over three years as investors cheered exit polls, which projected victory for the Bharatiya Janata Party-led National Democratic Alliance in the 2024 Lok Sabha elections, along with a better than expected GDP for the country. On Monday, both indices closed at record highs.

The NSE Nifty 50 closed 733.20 points, or 3.25%, higher at 23,263.90, and the S&P BSE Sensex gained 2,507.47 points, or 3.39%, to end at 76,468.70. Both Nifty and Sensex renewed their intraday highs of 23,338.70 and 76,738.89, respectively.

"The election results will come out tomorrow, and looking at the last two NDA wins, they have usually beaten most exit poll results," said Paras Matalia, fund manager and head of equity research at SAMCO Mutual Fund. "If that happens this time too, markets might see further upside, especially the PSUs and sectors like defence, power, manufacturing, and renewable energy benefiting from the government's focus.

Investors should stay invested, but with caution now that valuations have become more expensive, he said.

Alok Jain, smallcase manager and founder at Weekend Investing, stated that if the market senses a continuation, a significant amount of funds sitting on the sidelines could continue to pour in. Over time, the build-up of extraordinarily large FII short positions can unwind, and the expectation of new measures within the first 100 days can sustain the momentum, he stated.

He stated that there is a minimal likelihood of markets reversing unless the outcome on June 4 deviates from expectations. "There is an outside chance that the actual results may, in fact, be even stronger than the exit polls, as has been seen in the last three election exit polls, where final numbers were far more extended in the direction of the stronger swing."

Shares of Reliance Industries Ltd., State Bank Of India, ICICI Bank Ltd., HDFC Bank Ltd., and Larsen & Toubro Ltd. contributed the most to Nifty.

HCL Tech Ltd., Eicher Motors Ltd., Sun Pharmaceutical Industries Ltd., LTIMindtree Ltd., and Asian Paints Ltd. weighed on the index.

All sectoral indices on NSE ended higher, with Nifty PSU Bank shooting over 8%.

Broader markets also rose. The S&P BSE Midcap closed with 3.54% gains and the S&P BSE Smallcap ended 2.05% higher on Monday.

All sectoral indices on the BSE gained. S&P BSE Utilities rose the most. The market breadth was skewed in the favour of buyers.

Around 2,341 stocks rose, 1,619 fell and 155 remain unchanged on the BSE.