Mumbai: The markets soared higher on Friday as several exit polls showing clear victory for BJP in the recently concluded assembly election in Gujarat and Himachal Pradesh fired up sentiments on the Dalal Street.
The Nifty scaled above the crucial 10,300 level mark and closed the session at 10,333.25, gaining 81.15 points or 0.79 per cent. The Sensex ended the day at 33,462.97, gaining 216.27 or 0.65 per cent.
According to exit poll results announced on Thursday post market hours, BJP is expected to retain Gujarat while it is likely to wrest Himachal Pradesh from Congress.
“A victory for the BJP will be received well by the market while a surprise defeat (against the forecasts of the exit polls) would be a large negative surprise for the market. In the former case, we would see a modest rally and in the latter, a moderate correction as the market will also start focusing on India’s weakening macro position,” said Sanjeev Prasad, co-head and managing director at Kotak Institutional Equities.
Looking ahead, Mr Prasad believes that the markets would shift their focus towards corporate earnings growth as earnings multiple have limited scope to expand from current high levels across sectors and are largely factoring in strong earnings growth over the next two years. Additionally, India’s macroeconomic position looks weaker and will deteriorate further if global crude prices were to harden from the current levels,” he added.
While the assurance of political stability seems to have cheered market participants, Karthikraj Lakshmanan, senior fund manager, equities at BNP Paribas Mutual Fund believes that investors would now look forward to the Budget 2018.
