Stock markets may reach new heights says market experts post exit poll outcomes. Most of the exit polls gave Modi led NDA government a comfortable win, have enthused market experts.
The stock market may open with big gain on Monday but Nilesh Shah, MD Kotak Mutual Fund says Indian stock markets have already factored in the government’s continuity, resulting in a premium valuation compared to peers.
Shah suggests focusing on quality stocks in private banks, consumer staples, and the manufacturing sector.
“Market has discounted continuity of government. Our premium valuation over peers also discount the continuity of the government. We believe it is time to play for quality stocks at reasonable valuation across Private banks, consumer staples and manufacturing sector” says Nilesh Shah
Shah further added “It is time to book profit from low floating stock high valuation momentum stocks. While traders may bet upon events like exit polls and elections, we recommend people to be an investor into the journey of becoming a Viksit Bharat”.
Porinju Veliyath, Founder – Equity Intelligence noted that there might be intense buying on Monday, pushing the Index to new highs, but future corrections are also expected. The short covering by foreign investors could push Nifty above the 25,000 mark.
“Smart people could easily predict the election outcome, so equity markets remained strong and richly valued ahead of elections. Of course, there could be some frenzied buying on Monday, and the Index will go to new highs. However, don’t rule out corrections in the future. For long-term investors, Indian equity will continue to be a fantastic asset class backed by a fast-growing economy led by the most progressive government in the history of modern India” said Porinju Veliyath.
Market experts highlight that the public sector undertakings are now well-managed, and their valuations are expected to match those of blue-chip private firms. Infrastructure and real estate sectors to watch for buying opportunities during corrections. Despite high valuations, Indian equity is valued for good reasons.
The Foreign Institutional Investors were in selling mode in April and May, but now after the exit polls experts pointed out that the fresh buying by foreign investors may come in the Indian market but it can also be delayed till the final results and the formation of the new government.
The Banking and Market Expert Ajay Bangga said that “FIIs will wait for 4th June confirmation. Expect a gap up on Monday and the first half of Tuesday and then some profit booking. Main FII money that went out on election outcome jitters will wait for new govt composition and July Union Budget and then reinvest”.
Madhusundan Kela, founder MK Ventures said that the next five years will be a golden period for the Indian stock market. He said “It’s golden period for next 5 years – real Amrit Kaal”
In the past two occasions when Modi win with formidable margins, the Indian markets have given positive reactions. On the counting day for 2014 general elections i.e 16th May 2014, the BSE Sensex (Bombay Stock Exchange) surpassed the level of 25,000 for the first time, surging 1,470 points intraday to hit a lifetime high of 25,375.63. The 50-share NSE Nifty also breached the 7,500-mark, reaching an all-time intraday high of 7,563.50.
Again post 2019 elections, on the counting results day 23rd May, the BSE Sensex and Nifty 50 indices surged to record highs after the election results indicated a clear majority for the BJP-led NDA. The Sensex crossed the 40,000-mark, and the Nifty breached 12,000 points. Investors were optimistic about policy continuity and reforms under the new government.
Experts believe, markets will react positively on Monday and again on Tuesday, when counting begins. But they also added seeing the strength of the Indian economy, retail investors must invest for a longer duration to derive better benefits with the growth of the Indian Economy.
