Sensex, Nifty Hold All-Time Highs on Modi Exit Poll Favor; Bank Nifty Nears 51,000

The exit polls indicating a clear victory for the NDA government boosted the Nifty and Sensex benchmarks to record levels on June 3. All 13 sectoral indices showed gains, with the financial services, oil and gas, and power sectors driving the surge in Nifty. On this day, Nifty reached a historic peak of 23,338, while Sensex soared to a new high of 76,738.

"Tech advancements and increased retail participation have significantly contributed to this upswing," said Puneet Maheshwari, Director, Upstox.

By the close of trading, the Sensex had risen by 2,507 points or 3.4%, settling at 76,468, while the Nifty 50 had increased by 733 points or 3.3%, ending at 23,263. Approximately 2,210 shares advanced, 1,310 shares declined, and 103 shares remained unchanged. In the broader market, the BSE Midcap index climbed by 3.5%, and the BSE Smallcap index saw an increase of over 2%.

Analysts also linked the surge in the Indian equity market to several positive factors: India's GDP surpassed expectations at 8.2% for FY24, there was a reduction in the fiscal deficit, the monsoon arrived earlier than anticipated, and GST collections rose by 10% to ₹1.73 lakh crore in May.

In the Nifty 50, NTPC, SBI, and Adani Ports emerged as the top gainers, with their stocks increasing by 9.3-10.6%. On the other hand, HCL Tech, LTIMindtree, and Eicher Motors were the worst performers, with their stocks declining by 0.6-1.3%.

Today, SBI reached a significant milestone by becoming the seventh Indian listed company to exceed ₹8 lakh crore in market capitalization. Adani Group stocks also garnered attention as they surged for the second consecutive session, reflecting the overall bullish trend in Indian equities.

The Nifty PSU Bank index rose by 8.6%, making it the top gainer among sectoral indices. Following closely were Nifty Oil & Gas and Nifty Realty, which increased by 7% and 5.7%, respectively.

The Nifty Bank index achieved a significant milestone by surpassing the 51,000 mark for the first time, reaching an intraday high of 51,133. "This positive movement was fueled by exit polls predicting a third term for Prime Minister Narendra Modi and his BJP party," said Ashish Kumar, Founder of StoxBazar. At close, Nifty Bank was up 4.3% at 51,097.

Bank of Baroda led the surge with a 12% increase, followed by State Bank of India (SBI) with a 9.5% gain. Axis Bank, IndusInd Bank, and Punjab National Bank saw increases of over 4-6%. Other banks such as Federal Bank, ICICI Bank, HDFC Bank, and Kotak Mahindra Bank experienced rises of 2-4%.

"If the exit poll results are confirmed by the actual election outcome, we could see further gains, with Nifty possibly advancing towards 23,500 and Sensex approaching 77,000," said Santosh Meena, Head of Research at Swastika Investmart. He expects Nifty 50 to surpass 24,000 in the coming days after a period of consolidation.

"There is little chance that these markets will roll back unless the outcome on June 4th is not per expectation," said Alok Jain, Founder of Weekend Investing. Jain said that the actual results may be even stronger than the exit polls. "All in all, markets are putting their faith into the leadership with great potential for India to emerge as a fast-growing, strong, and stable nation,” he said.

Weekend exit polls indicated that the alliance led by Modi's Bharatiya Janata Party (BJP) is expected to increase its current 303 seats in the 543-member lower house, potentially securing a two-thirds majority, sufficient to initiate constitutional amendments. While a victory is widely anticipated, the official results, if confirmed, would exceed analyst forecasts and be viewed positively by equity markets, which have already reached record highs driven by economic growth.

"People will continue to clamour for a correction, but I believe every dip will be bought into. The month of June could be a defining one for the bulls, so one should make the most of this opportunity and stay a bit greedy," Vikram Kasat, Head, Advisory at brokerage Prabhudas Lilladher said.