Indian equity benchmark indices Sensex and Nifty could see a strong rally this week after exit poll predicted the BJP would win the Lok Sabha elections 2019 with a thumping majority. Analysts believe the market will cheer the prospect of a stable government at the centre. Also, the possibility of the BJP returning with absolute majority can lift the spirit further.
"Most exit polls have predicted NDA to win the Lok Sabha elections with a good margin. This was partly discounted in the markets over the last few days. The street would like it even more if the BJP on its own gets a majority in the Lok Sabha," said Deepak Jasani, Head, Retail Research.
But, that's not to say the market won't take the exit polls with a pinch of salt. They have often been wrong in the past, after all. According to Jasani, the market would like to see a strong government, but fingers would be crossed till the final results were announced on May 23.
"Going by the way the exit polls in the last two elections were off the mark from the actual numbers, the markets would get excited but not super excited," Jasani said.
Despite the circumspection, there is going to be a lot of excitement and investors can hope for a dramatic trading week. "This week is going to be the most happening of the year wherein all eyes would be glued to not 'stock quotes' but 'vote quotes'," said Jimeet Modi, Founder and CEO, SAMCO Securities & StockNote.
Quarterly earnings would also impact trading as some major companies are scheduled to announce their financial report card this week, including Tata Motors, Canara Bank and Cipla. Besides, the US-China trade related issues, crude oil prices, rupee movement and foreign funds trend would influence trading sentiment, they added. During the last week, the BSE Sensex gained 467.78 points or 1.24 per cent. On Friday, the 30-share benchmark closed 537.29 points, or 1.44 per cent, higher at 37,930.77. Similarly, the broader Nifty rose 150.05 points, or 1.33 per cent, to settle at 11,407.15.
"Indian markets have shown tremendous strength before the long-awaited exit polls, despite the ongoing ambiguity in US-China trade talks," said Jagannadham Thunuguntla, Senior VP and Head of Research (Wealth), Centrum Broking Limited.
With PTI inputs