Sensex, Nifty Hit Record Highs on BJP Victory Predictions; Investors Eye 100-Day Reform Agenda

Sensex and Nifty opened at record highs after exit polls forecasted a landslide victory for the BJP. Both indices surged nearly 3%, with Nifty 50 reaching 23,338.70 and Sensex hitting 76,738.89. By 9:45 am, Sensex had climbed 1,731 points, or 2.3%, to 75,692, and Nifty 50 had risen 537 points, or 2.4%, to 23,067. Approximately 2,633 shares advanced, 571 shares declined, and 117 shares remained unchanged.

"Exit poll results indicating a clear victory for the NDA with around 360 seats have alleviated the election jitters that have been weighing on markets in May," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

All 13 major sectoral indices were in the green. Nifty Energy, Nifty PSU Bank, and Nifty Realty led the gains, each rising by 4-5%. Nifty Pharma and Nifty Healthcare saw the smallest gains, with both indices increasing by 1.2%. In the broader market, the BSE Midcap index gained nearly 4%, while the BSE Smallcap index rose by 2%.

Among individual stocks, Adani Ports, Shriram Finance, and Power Grid were the top performers in early trade, each climbing 7-10%. Adani Ports shares rose by 10% following the news that its wholly owned subsidiary, Adani International Ports Holdings Pte Ltd (AIPH), signed a 30-year concession agreement with the Tanzania Ports Authority to operate and manage Container Terminal 2 at the Dar es Salaam Port in Tanzania.

"While we won't be completely out of the woods until the official election results are announced, there is a renewed sense of confidence in the market. The exit polls have significantly reduced uncertainty," said Nirav Karkera, Head of Research at Fisdom.

Market volatility observed in May is expected to subside after the election results are announced on June 4, according to experts. "Our markets are expected to be vulnerable until the election outcome, and volatility is likely to remain high during this time," said Sameet Chavan, Head Research, Technical and Derivative, Angel One. At 9.45 am, India VIX was down 21% at 19.3.

Post-election, the market's focus will shift to the first 100 days of the new government and the union budget, said analysts.

India's gross domestic product (GDP) for the January-March quarter of Q4FY24 grew by 7.8%, propelled by strong growth in the manufacturing sector. The Indian economy surpassed D-Street estimates, achieving an overall growth rate of 8.2% for FY24. "The bulls will be further emboldened by the better-than-expected 8.2% GDP growth, which was announced after market hours on Friday. Both technically and fundamentally, the market is poised for a rally," Vijayakumar added.

"After a huge gap up opening Nifty can find support at 23,200 followed by 23,100 and 23,000," said Deven Mehata, Research Analyst at Choice Broking. "On the higher side, 23,650 can be an immediate resistance, followed by 23,700 and 23,800," he added.

Exit polls on Saturday forecasted that Prime Minister Narendra Modi will secure a third consecutive term, with the BJP-led NDA anticipated to achieve a substantial majority in the Lok Sabha elections. The vote counting is scheduled for June 4.