NEW DELHI: The exit polls for the 2024 Lok Sabha elections have predicted a resounding victory for the BJP-led NDA, with most polls projecting it to win between 350-400 seats. This is in line with the opinion polls released last month, and far exceeds the expectations of the stock market, which had been pricing in a lower seat count of around 300-320 for the NDA in recent weeks.
According to various reports, analysts believe that the market will react very positively to these numbers, with the Nifty potentially sustaining a level of 22,500 and only seeing upside from here.The strong performance of the incumbent government is seen as a rare and historic event, with Prime Minister Narendra Modi set to return to power for an unprecedented third consecutive term.
The exit poll numbers have alleviated some of the recent jitters in the market, which had been caused by suggestions that the NDA seat count could come closer to 300. With the clarity provided by the exit polls, foreign portfolio investors (FPIs) who may not fully understand the political situation in India are expected to bring in dollars into domestic equities.
While there may be some nervousness in the market as it awaits the actual election results on June 4, analysts believe that the exit poll numbers will be welcomed by the market on Monday. The prospects of unobstructed functioning of the parliament in the third term of the Modi government are expected to deliver many progressive reforms in India, attracting premium dollar investments as the country aims to become a $12 trillion economy by 2035.
However, some analysts caution that profit booking may occur in the second half of the trading session on June 4, following an initial upward movement. This pattern has been observed in the previous two election outcomes in 2014 and 2019. From a technical perspective, the 22,400 level, near the 50-day EMA, is seen as critical on the downside, while the 23,400 level will be crucial on the higher side.