As of 7:05 a.m. IST, the Gift Nifty traded at 23,353 points, suggesting that the Nifty 50 will begin higher than its close of 22,530.70 on Friday.
Bengaluru: Following weekend exit polls that suggested Prime Minister Narendra Modi’s government will serve a third term, analysts predict that Indian equities would begin higher on Monday, with gains expected in manufacturing, capital goods, and infrastructure firms.
As of 7:05 a.m. IST, the Gift Nifty was trading at 23,353 points, suggesting that the Nifty 50 will begin higher than its close of 22,530.70 on Friday.
The S&P BSE Sensex and Nifty 50 both fell roughly 2% last week in expectation of the June 4 election results.
According to exit polls issued on Saturday, the National Democratic Alliance, led by the Bharatiya Janata Party, is expected to secure a two-thirds majority in the lower house, which consists of 543 members.
The polls were conducted after the six-week general election in India, during which the campaign became controversial and centered on caste and religion.
Although their poor history, exit polls in India are expected to improve market sentiment, according to analysts.
According to Narendra Solanki, head of fundamental analysis for investment services at Anand Rathi Shares and Stock Brokers, the exit poll results are highly positive for the current government.
According to Mr. Solanki, the markets might not have priced in such strong numbers, and we might see some evidence of that in today’s trading session.
They suggested that foreign investors who sold $3 billion worth of Indian stocks in May increase the number of their purchases.
On Friday, these investors net purchased shares valued at 16.13 billion rupees, or around $193 million, while domestic institutional buyers bought 21.14 billion rupees worth of stocks.
Given that they have a net short position in Indian shares, foreign investors are quite likely to short cover. They will keep buying until they are net long, which might cause a rise, according to Quantum Securities director Neeraj Dewan.
In a paper published over the weekend, Motilal Oswal predicted that the next government would prioritize infrastructure development, manufacturing, and capital expenditures.
The economy expanded by a stronger-than-expected 7.8% in the January–March quarter, according to data released after market hours on Friday, which might increase the mood, according to Solanki.
