Markets likely to open higher as exit polls signal sweep for NDA
MUMBAI : India’s benchmark Nifty index may open higher by 2.5-3% on Monday, with exit polls predicting a sweeping victory for the ruling Bharatiya Janata Party-led National Democratic Alliance in the just-concluded national election. The gap-up is expected to result in a rush for short covering by foreign institutional investors and proprietary traders who had feared the NDA might not be able to secure more than 300-310 Lok Sabha seats, say market experts Mint spoke with.
A strong electoral mandate for the ruling alliance would ensure policy and fiscal continuity that have helped India retaining its crown as the world’s fastest-growing major economy. Most exit polls announced on Saturday, following the final leg of the seven-phase national election, see the BJP-led NDA winning about 350 parliamentary seats, with at least three pollsters predicting a range of 370-400 seats.
“I believe there will be a surprise on the positive side, with the NDA likely to win 400 seats," said A. Balasubramanian, managing director and chief executive, Aditya Birla Sun Life MF.
“On Monday, it’s likely to be a 2.5-3% gap-up, followed by a short squeeze. There were a lot of shorts in the system building up over the past three-four weeks, which the bears will perforce have to cover." A 3% higher opening could fuel the Nifty to above 23,200 points, up from Friday’s closing level of 22,530.70.
This could result in bears “scurrying for cover" on Monday and possibly Tuesday as well, said Andrew Holland, CEO of Avendus Capital Public Markets Alternate Strategies. “There is the GDP which is north of 8% (in FY24), the RBI dividend of ₹2.11 trillion, and now the exit poll predicting a stronger showing by NDA than in 2019, which will fuel a 2.5-3% gap-up
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