The exit poll results that predict a strong show by Bharatiya Janta Party (BJP) are likely to fire up markets on Thursday.
As per the exit polls, the Narendra Modi-led BJP is likely to come to power in at least three out of five states. The polls by various agencies and media houses like ABP/Nielsen, CVoter, Today’s Chanakya see BJP coming into power in Rajasthan with strong numbers while it is likely to scrap through in Madhya Pradesh and Chhattisgarh, where it is leading Congress by few seats. Also in Delhi, though there is no clear leader as yet, the BJP is likely to do much better than Congress.
Experts said with exit polls coming in better than or in line with expectations, the Indian equities that have largely bucked the global downtrend in last couple of sessions may continue with their uptrend on Thursday.
Though the Nifty lost 40.9 points, or 0.66%, to close at 6160.95 on Wednesday, the Indian markets have largely outperformed rest of its peers in last two-three trading sessions.
Mehraboon Jamshed Irani, principal and head - priority client group at Nirmal Bang Securities, said though markets are pricing in a BJP win in three out of four states, they may still see upmove as markets have withstood negative news and are waiting for slight good news or excuse to move up.
“The current market in short term is not for those tracking fundamentals but for those who can understand politics better. We may continue to see positive bias and a gap up opening tomorrow,” he said.
The Nifty December futures on the Singapore Exchange (SGX) that remain open till 11.30 pm (IST) were last trading at 6248, up by 0.74%, or 46 points (as of 9.36 pm on Wednesday).
Siddarth Bhamre, head of derivatives at Angel Broking, said foreign institutional investors which have been positive on markets have also started buying Nifty call options of strike price 6500 to 6700.
“Indian markets that have rallied on Modi-effect of late have remained largely insulated from global weakness in the last three sessions. Though the markets are largely discounting BJP doing good, they are likely to see big upmove towards 6400-6500 levels by next week if BJP manages to come into power in two or three out of the four states (excluding Mizoram),” he said.