Stock Markets Soar After Exit Polls Predict BJP Win; Most Sectors Hit Record Highs

On June 3, all sectoral indices except Nifty FMCG, Healthcare, IT, and Media reached record highs after a strong rally in the Indian markets. This surge came after exit polls predicted a landslide victory for the Bharatiya Janata Party (BJP).

The Nifty Index jumped over 3% after exit polls projected Prime Minister Modi’s BJP-led government would secure over 350 Lok Sabha seats.

Sector Performance

• Nifty MidCap and SmallCap 100: Up over 2.5%.
• Nifty PSU Bank: Leading with an 8% rise.
• Nifty Oil & Gas and Realty: Up 7% and 6% respectively.
• Nifty Bank: Increased by 3.7%.
• Nifty Auto, Private Bank, and Metal: Each rose nearly 3%.
• Nifty IT and Healthcare: Saw marginal gains.

Analysts expect continued policy stability and aggressive reforms if the BJP secures a third term, boosting investor confidence. They recommend cautious investment due to high valuations, with potential benefits in PSUs, defense, power, manufacturing, and renewable energy sectors.

Analysts’ Views

• Elara Capital: Prefers Mid & Small Caps but advises a selective approach due to high valuations.
• Jefferies: Optimistic about capex stocks, favoring real estate, industrials, and power for the long term. Preferred stocks include HDFC Bank, IndusInd Bank, and Eicher Motors.
• Motilal Oswal: Overweight on financials, consumption, industrials, and real estate sectors, recommending stocks like ICICI Bank and SBI.
• JPMorgan: Sets Nifty target at 25,000 if BJP retains power, focusing on defense, waterways, and manufacturing themes.

Nifty FMCG, IT, and Healthcare

• Nifty FMCG: 5% below its all-time peak.
• Nifty IT: 20% below its high.
• Nifty Healthcare: Just 2% shy of its record.

Investors are advised to stay cautious and look for profit-booking opportunities amid high market valuations.