Following the exit polls for the Lok Sabha Election 2024, Bulls are likely to tighten their grip on D-street in the next market session on Monday, June 3.
Exit Polls analysis
A favourable outcome for the incumbent government post the election results, policy continuity in the form of a good budget and positive cues from global and domestic markets/economy, analysts said, will set the stage for a fresh bull run in the Indian stock markets over the next few months.
“Exit polls results which indicate a clear victory for the NDA with around 360 seats completely removes the so-called election jitters which have been weighing on markets in May. This comes as a shot in the arm for the bulls who will trigger a big rally in the market on Monday,” said Dr V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Sensex
The S&P Sensex is expected to rally up to the 78,950 – 80,000 level, showing an 8.1 per cent rise in case of a bull run scenario on the BSE benchmark index. However, in case, the BSE Sensex is unable to break past the 76,275 level, we may enter a consolidation range, wherein the support at 72,240 becomes a crucial level.
On the downside, sustained trade below 72,240, could see the index test 71,000 levels, or slide deeper down to 68,850 levels.
Nifty 50
The NSE Nifty 50 index seems to witness heightened volatility as the election results approaches. The market is currently trading at a premium, having largely discounted the growing likelihood of the continuation of the Modi era, said analysts.
“Consequently, we cannot rule out the possibility of profit booking in the second half of the trading session following an initial upward movement,” said Arvinder Singh Nanda, Senior Vice President at Master Capital Services Ltd.
“Historical trends from the previous two election outcomes in 2014 and 2019 have shown similar patterns, where the market closed with minimal change after experiencing significant volatility during the early trading hours. Technically, the 22,400 level, near the 50-day EMA, is critical on the downside, while the 23,400 level will be crucial on the higher side,” added Nanda.
Emkay’s Madhavi Arora added that once the election event risk is over, all eyes would be on the budget in July, which could continue with the consolidation process while improving the budget internals. ‘’We see a twin deficit to further improve ahead, which limits external shocks to India further via financial channels in case the global cycle turns averse,” said Arora.
Bank Nifty
The Bank Nifty will determine the swing in the market. Break and sustained trade above 50,380 levels, can trigger a rally towards 51,900 and 53,050 levels – this indicates a potential upside of up to 8.3 per cent from present levels.
On the flip side, break and sustained trade below 48,300 levels, can trigger a slide towards 46,200 and 44,660 levels.