Stock Market Soars as Exit Polls Predict BJP Victory

June 3, 2024
Paul Svensen

The Indian stock market experienced a significant surge on June 3, 2024, following exit polls predicting a substantial victory for the Bharatiya Janata Party (BJP) in the Lok Sabha elections. Both the Sensex and Nifty indexes hit record highs, driven by investor optimism about political stability and robust economic data.

Key Takeaways

Sensex surged over 2,000 points, hitting an all-time high of 76,738.89.
Nifty 50 jumped 808 points to reach a record high of 23,338.70.
Exit polls predict a third term for Prime Minister Narendra Modi with the BJP-led NDA expected to win over 350 seats.
Positive economic indicators, including an 8.2% GDP growth, further bolstered market sentiment.

Market Performance

The 30-share Sensex rallied over 2,000 points in early trade, while the 50-stock Nifty recorded its biggest jump in four years. At pre-open, Nifty surged over 800 points or 3.58% to 23,227.90, and the Sensex jumped 2,621.98 points or 3.55% to 76,583.29. Both indexes hit their record high levels, with all stocks in the green.

Top Performers

Adani Ports, Adani Enterprises, Power Grid, Shriram Finance, and NTPC were among the top performers leading the market rally. The latest GDP data, suggesting a robust 8.2% fiscal growth, also contributed to the positive market sentiment.

Expert Opinions

Varun Aggarwal, founder and managing director of Profit Idea, noted, "Buoyant sentiments are driven by India’s impressive Q4FY24 GDP growth of 7.8 per cent, surpassing expectations, with the fiscal year’s growth standing at 8.2 per cent." However, he cautioned that the market would remain volatile in anticipation of the final election results.

Exit Poll Predictions

An aggregate of 12 exit polls predicted that the BJP would return to power with the ruling NDA alliance securing 365 seats. A party or alliance needs at least 272 seats to form a government in India. The market prefers political stability, and a change in government usually risks volatility, according to analysts.

Opposition’s Response

While the BJP welcomed the exit poll predictions, the Opposition dismissed the forecast, stating that the actual counting day would present a different picture. Congress chief Mallikarjun Kharge claimed that the INDIA bloc would win at least 295 seats out of the total 543.

Broader Market Impact

The market rally was not limited to large-cap stocks. The BSE Midcap index surged 4% to hit its fresh all-time high, while the BSE Smallcap index jumped 3.6%. Nearly 200 stocks, including major players like SBI, ICICI Bank, and Bharti Airtel, hit their fresh 52-week highs.

Global Cues

Positive global cues also supported the domestic market sentiment. Asian markets traded higher, and US stocks ended the previous week on a positive note, driven by hopes of interest rate cuts.

Future Outlook

Analysts anticipate that the Indian equities will continue to rise in the coming days, with the Nifty potentially reaching new all-time highs. However, they also advise caution as the market remains volatile ahead of the final election results and other key economic data.