IANS

Equities likely to rally; as exit polls give NDA a comfortable majority

By Rohit Vaid

Mumbai, May 19 (IANS) Come Monday, the Indian equity market is set to rally on the back of Lok Sabha elections 2019 exit polls, most of which have predicted a comfortable majority for the BJP-led National Democratic Alliance (NDA).

Market observers said that though a BJP-led NDA victory in the general election was partly discounted, key indices are likely to have a healthy gap-up openings on Monday.

It is expected that NSE Nifty50 might open with a gap-up of 90-150 points and later consolidate.

The seven-phase long 2019 general elections concluded on Sunday after which exit polls were released. The final results will be announced on May 23.

“Post the exit polls, we can expect Nifty to again test its recent high before the 23rd of May. Fresh breakout into the 12,000 to 12,500 zone would depend on whether BJP gets majority on its own on the 23rd of May,” Rusmik Oza, Head of Fundamental Research, Kotak Securities, told IANS.

“Lot of local money has remained on the sidelines, which can come into the markets post today’s exit polls.”

Last week, the pre-election rally in domestic market was cut short by escalation in trade tensions between the US and China, along with mixed Q4 results and expectation of consumption slowdown.

“Markets likes policy continuance, and could view exit poll results favourably, having priced in a less dominant position to ruling party earlier,” said Geojit Financial Services Chief Market Strategist Anand James.

“But break away moves on either side are less likely as Friday had already witnessed decent gains from key supports, and moreover, markets are likely to be more guarded in their reaction to exit polls.”

According to Deepak Jasani, Head of Retail Research for HDFC Securities: “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. However, 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.”

On the currency front, the Indian rupee can test the 69.20 levels. Last week, it had deprecated by 31 paise to close at 70.23 against the US dollar from its previous week’s close at 69.92 per greenback.

“Initial reaction shall be positive. Equities and rupee are expected to rally at least 1-2 per cent,” said Sajal Gupta, Head Forex and Rates, Edelweiss Securities.

“The rupee can test the 69.20 levels and may give away some gains later in the week… Nifty can test back the 11,800 points level in the coming weeks.”

(Rohit Vaid can be contacted at [email protected])

–IANS

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(This story has not been edited by Newsd staff and is auto-generated from a syndicated feed.)
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