Domestic markets are likely to open over the moon on Monday, thanks to exit polls that suggest the return of the Bharatiya Janata Party-led National Democratic Alliance with a thumping majority.
Gifty Nifty at 23,345 in early deals indicates a gap-up opening of about 645 points, as Nifty June futures closed at 22,700 on Friday.
Dr VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said “Exit polls results, which indicate a clear victory for the NDA with around 360 seats, completely removes the so-called election jitters, which have been weighing on markets since May. This comes as a shot-in-the-arm for the bulls, who will trigger a big rally in the market on Monday.
“Largecaps in financials, capital goods, automobiles and telecom are likely to lead the rally. The bulls will be further emboldened by the better-than-expected 8.2% growth in GDP numbers, which came after market hours on Friday. Technically and fundamentally, the market is poised for a rally,” he added.
Meanwhile, equities across the Asia-Pacific region, except China, are ruling firm in the range of 0.75-2 per cent.
According to analysts, foreign portfolio investors, who until now remained net sellers, may change strategy and turn buyers.
Vipul Bhowar, Director, Listed Investments, Waterfield Advisors, said; “The relatively high valuations and weak earnings, particularly in the financial and IT sectors, where foreign portfolio investors (FPIs) have a high allocation, along with political uncertainties such as ambiguity around the outcome of the Lok Sabha elections, global risk-off sentiment, and the appeal of Chinese markets, have led to FPI selling.
Strong GDP growth, manageable inflation, political stability, and the expectation that the RBI is done tightening monetary policy creates a positive outlook for the Indian economy, marking a turnaround from their net selling in May, he added.
