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India’s Nifty futures surge nearly 3% as exit polls point to Modi victory

Published 2024/06/03, 04:08
© Reuters

Investing.com-- Futures for India’s benchmark Nifty 50 index surged nearly 3% in morning trade on Monday after a slew of exit polls over the weekend showed that incumbent Prime Minister Narendra Modi was set for a third consecutive term. 

The Gift Nifty 50 Futures jumped 2.8% to a record high of 23,377.0 points by 22:03 ET (02:03 GMT).

Several exit polls released over the weekend indicated that the NDA alliance, led by the Bharatiya Janata Party (BJP), was largely set for a victory in the 2024 general elections, which concluded on June 1. 

Exit polls also indicated that the NDA alliance was likely to clinch a widely touted 400-seat milestone in the lower house, the Lok Sabha. While exit polls have had a dubious history of over or understating election results, they have so far been successful in predicting the broader trends in Indian elections.

An NDA victory presents a third term for incumbent Prime Minister Narendra Modi, who was largely at the center of campaigning efforts by the BJP. The official results of the election are set to be announced on June 4. 

Investors have largely welcomed Modi’s business-first policies, especially as India became the fastest-growing major global economy over the past two years. This outsized growth is set to continue in the current fiscal year, despite headwinds from high levels of unemployment and inflation, along with high-for-longer interest rates. 

The Nifty 50 has also hit a series of record highs on optimism over India’s economy, which attracted a slew of foreign investors over the last two years. 

Manufacturing and infrastructure stocks are set to benefit from a Modi victory, given that the government has focused a bulk of its efforts on the two sectors over the past two years.

Still, analysts at CLSA warned in a recent note that an Indian stock rally in the wake of a BJP victory had limited room to run, and that the Nifty may see a sharp pullback in the next few weeks. 

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