Share Market: Analysts Expect Markets To Rally As PM Modi Remains Favoured For Third Term In Office

Experts pointed out that markets tend to prefer consistency and predictability, and this makes the outcome pointed out in the exit polls more likely today

As the country awaited the results for the Lok Sabha Elections 2024 on Tuesday, investors across the country also remained wary of how the stock market will react today to the election outcome. In the early hours on Tuesday around 8:20 AM, the GIFT Nifty traded above 23,500, indicating a gap up to be expected in the Nifty50 index.

The stock markets on Monday reacted positively to the predictions from the exit polls released on Saturday. The polls projected a comfortable win for PM Narendra Modi’s Bharatiya Janata Party (BJP)-led alliance in the range of 300 to 350 seats in the lower house. This sentiment translated into a massive bull run in the stock market as both key equity benchmark indices reached fresh all-time highs during the day. 

As the session closed, the S&P BSE Sensex settled for the day at 76,468.78, rallying ahead by more than 2,500 points, while the NSE Nifty50 ended trading at 23,263.90, inching higher by over 700 points. 

Experts noted that if the poll results translate into election outcomes, the bull rally could continue and markets could soar further on Tuesday. Elaborating on the market expectations, Atul Prakash, CEO, Bigul, said, “Election buzz has fueled short-term optimism, potentially lifting the Nifty in the near term based on exit polls. However, the market's true direction awaits the official results, which will be the immediate driver of investor sentiment. This uncertainty is likely to create volatility as investors seek clarity. In the long term, fundamentals like economic reforms, fiscal policies, global markets, and corporate earnings will take centre stage. While short-term fluctuations are expected, prudent investors should prioritise fundamental analysis and strategic diversification to navigate potential turbulence and capitalise on long-term opportunities.”

Gaurav Goel, Entrepreneur and SEBI registered Investment Advisor, also pointed out that markets tend to prefer consistency and predictability, and this makes the outcome pointed out in the exit polls more likely. However, he added, “This outcome was envisaged from a long time and market had automatically priced bulk of this win in its price. Of course, there was some amount of nervousness in last one month, and markets corrected by almost 2.5 per cent after hitting all time highs.”

Sharing his outlook for the market performance today, Goel said, “We expect marginal gains tomorrow which is the result day if the expectation hold true. However, if for some reason the results are against expectations then markets will react adversely in a big way. The probability of this event is remote.”

Kranthi Bathini, Director - Equity Strategy, WealthMills Securities Pvt Ltd, in his predictions said that if the results today match the market expectations as per the exit poll, the Nifty can rally another 200 to 300 points. “23,300 to 23,500 is the range we can look on the upside, and on the downside, we can expect Nifty around 23,000. If investors have any kind of low quality stocks in their portfolios, one can flush it off during these kind of times in the market,” Bathini advised.