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<\/div>\n<\/div>\nIndian stocks, bonds, and the rupee are poised to climb on Monday after exit polls indicated a resounding victory for Prime Minister Narendra Modi’s party.<\/p>\n
The polls suggest the Bharatiya Janata Party-led alliance will clinch substantially more seats than the 272 required for a majority in the 543-seat lower house of Parliament. The votes will be counted on Tuesday.<\/p>\n
The predictions are likely to calm investors rattled by recent stock market volatility, driven by concerns that the BJP might fall well short of PM Modi’s ambitious 400-seat target due to low voter turnouts and tight races in several states. A landslide win would enable the party to push through policies that are seen as crucial for boosting India’s economic growth, which is already among the world’s fastest.<\/p>\n
“There was some skepticism, with volatility picking up as some people were getting jittery on the election outcome. Now it will settle – this is a resounding vote for continuity,” said Vinit Sambre, who oversees about $12 billion as head of equities at DSP Mutual Fund in Mumbai. “Markets could react positively on Monday.”<\/p>\n
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<\/div>\n<\/div>\nWhile the final results might differ from the exit polls, the strength of the projected victory is expected to benefit risk assets. Indian equities reached a record in May, while the bond markets are near their highest levels in about a year. Most pollsters predict the BJP and its allies to win between 350 and 400 seats. In 2019, the alliance won 352.<\/p>\n
“The suggested size of the majority would allow the government to continue unabated with its current policy program,” said Gary Dugan, chief investment officer at Dalma Capital Management Ltd. in Dubai. “We could imagine a 3-5% return from the market on Monday.”<\/p>\n
Read |\u00a0<\/strong>Will BJP Cross 370 Seats? What Bookies In Shadow Betting Market Expect<\/a><\/p>\n Should the results on June 4 align with the exit polls, analysts expect the NSE Nifty 50 Index to reach a new record. The main gauge slid nearly 2% to 22,531 last week as foreign investors treaded cautiously ahead of the election outcome.<\/p>\n “Foreign investors will need to cover short positions quickly,” said Abhay Agarwal, founder and chief investment officer at Piper Serica Advisors. “Margin calls on short positions may lead to the market spiking beyond 23,000 on Monday – a new high – and close to 23,500 on June 4th” if the numbers for the ruling alliance are above 350, he said.<\/p>\n Shares of state-owned companies, infrastructure-linked firms and those of some corporates including the Adani Group and Mukesh Ambani’s conglomerate may be in focus Monday.<\/p>\n These companies are perceived to benefit from the BJP’s pro-growth policies and their outpeformance may extend in case of a strong election result, a CLSA note said. Engineering giant Larsen & Toubro Ltd., and power generators NTPC Ltd. and NHPC Ltd. are among CLSA’s preferred stocks.<\/p>\n Sentiment will also be buoyed by faster-than-expected economic growth data, published after market hours on Friday.<\/p>\n India’s gross domestic product grew more than 8% in the fiscal year that ended in March, cementing the nation’s position as the world’s fastest-growing major economy.<\/p>\n