Indian markets opened with major gains today as early trends showed a majority for NDA crossing the 300 mark.
Nifty hit 12,000 mark for first time while Sensex also nearly 900 points to cross the 40,000 mark. Broader markets were also strong with both BSE midcap and smallcap indices rising over 1%
The Counting of votes for Lok Sabha election results 2019 started at 8 am today.
“The thumping victory for BJP surpassing its winning tally of 2014 (latest trends) has pleasantly surprised even the bulls. The risk-on sentiment in the market is quite evident. The continuation of policies and reforms is an added comfort. Post political outcome, going forward the narrative should come back to employment, economy and earnings,” said Jagannadham Thunuguntla, research head at Centrum Wealth.
When the early poll trends came in, Amit Gupta, chief executive of TradingBells, a brokerage firm said,“We absolutely believe Nifty will cross 12,000 if NDA manages to secure a majority.”
“However if this doesn’t happen and there is a hung parliament, or UPA comes into power, we can expect to see a huge correction, downside movement up to 10,450”, he added.
“Continuity at the center is beneficial to continuity in policy formulation and execution, notwithstanding the challenges of stabilising liquidity and softening impact of credit dislocation on NBFC/developers, which may require deeper involvements from RBI/government. Large banks are still a lot less impacted,” said Jefferies India in a note to its investors.
Jayant Manglik, president of retail distribution at Religare Broking said “Going forward in the medium term, we expect the markets to consolidate post the election outcome as focus would shift back to fundamentals (corporate earnings) and global cues which has been volatile due to re-escalation of trade tensions between US–China”
The markets are pricing in a clear victory for the NDA government he suggested, adding that movement in crude oil prices and currency will also provide direction to the markets.
Also, India’s 10-year bond prices hit a 13-month high today after latest trends showed NDA leading in over 300 seats. The 10-year bond yield was at 7.201%. Bond prices and yields move in opposite directions.