Markets trade firm on exit poll results; Nifty above 23,100 mark

Indian markets opened at record highs on Monday following exit polls predicting a decisive victory for the Bharatiya Janata Party-led National Democratic Alliance in 2024 Lok Sabha elections, coupled with foreign fund inflows. Foreign institutional investors (FIIs) bought shares worth Rs 1,613.24 crore on May 31. Soon, Sensex and Nifty trimmed some of their gains but continued their firm trade with gains of around two and half a percent each in early deals on account broad-based buying in all the sector indices led by Utilities, Power and PSU. Now, all eyes are on the Lok Sabha election results, which will be announced on June 04. Robust Q4FY24 GDP data also aided sentiments. India's Q4 GDP grew 7.8 per cent, beating estimates. 

Some support came in as the government data showed that India’s goods and services tax (GST) collection in May rose 10 per cent year-on-year (Y-o-Y) to Rs 1.73 trillion, taking overall collection to Rs 3.83 trillion so far in the current financial year (FY25). Besides, the growth of eight core industries rose to 6.2% in April from 6% in March, mainly due to higher growth achieved in natural gas, refinery products, coal, steel and electricity sectors. Market participants are looking ahead to the manufacturing PMI data to be out later in the day for more directional cues. 

On the global front, most of the Asian markets are trading higher, following the mostly positive cues from Wall Street on Friday, as traders remain cautiously optimistic on bets the US Fed will likely cut interest rates in September after data showed the US consumer price inflation came in line with estimates in April. Also, the manufacturing sector in Japan bounced back up into expansion territory in May, the latest survey from Jibun Bank revealed on Monday with a manufacturing PMI score of 50.4. Moreover, China’s manufacturing activity expanded at its fastest pace in nearly two years, in contrast to an official reading. The Caixin survey showed the headline seasonally adjusted manufacturing PMI rose to 51.7 in May from 51.4 the previous month.

Back home, auto stocks are buzzing reacting to their monthly sales numbers. In stock specific development, MosChip Technologies jumped after it secured a contract worth over Rs 500 crores from CDAC.

The BSE Sensex is currently trading at 75739.66, up by 1778.35 points or 2.40% after trading in a range of 75678.43 and 76738.89. All the 30 stocks were advancing on the index.

The broader indices were trading in green; the BSE Mid cap index rose 2.82%, while Small cap index was up by 1.99%.

The top gaining sectoral indices on the BSE were Utilities up by 6.87%, Power up by 6.54%, PSU up by 5.35%, Oil & Gas up by 4.80% and Capital Goods up by 4.52%, while there was no loser on the BSE sectoral front.

The top gainers on the Sensex were Power Grid up by 8.02%, NTPC up by 5.84%, Larsen & Toubro up by 5.58%, Mahindra & Mahindra up by 4.74% and SBI up by 4.70%.

Meanwhile, taking into account strong economic expansion along with post-election policy continuity, Moody’s Ratings has projected India to grow 6.8 per cent in the current year (2024), followed by 6.5 per cent in 2025. India’s real GDP grew 7.7 per cent in 2023, up from 6.5 per cent in 2022, driven by robust capital spending by the government and strong manufacturing activity.

Moody’s in its update to Global Macro Outlook 2024-25 said ‘We believe the Indian economy should comfortably register 6-7 per cent annual real GDP growth and we forecast around 6.8 per cent growth’. It said strong, broad-based growth will likely be sustained with post-election policy continuity. It said this year’s interim Budget targets capital expenditure allocation of Rs 11.1 lakh crore, or 3.4 per cent of GDP in 2024-25, 16.9 per cent above the 2023-24 estimates. It also said ‘We expect policy continuity after the general election and continued focus on infrastructure development’. 

It added private industrial capital spending is also set to pick up with ongoing supply chain diversification and the government’s production linked incentive (PLI) scheme to boost targeted manufacturing industries. Companies have invested around Rs 1.07 trillion through December 2023 across the 14 sectors covered under the PLI scheme, with exports surpassing Rs 3.40 trillion since the scheme’s implementation, as per government data. It further said ‘Healthy corporate and bank balance sheets, rising capacity utilisation and upbeat business sentiment also point to an improving private investment outlook’. It noted ‘Given the solid growth dynamics and inflation above the 4 per cent target, we do not expect policy easing any time soon’.

The CNX Nifty is currently trading at 23106.45, up by 575.75 points or 2.56% after trading in a range of 23062.30 and 23338.70. There were 48 stocks advancing against 2 stocks declining on the index.

The top gainers on Nifty were Adani Ports & SEZ up by 9.75%, Adani Enterprises up by 8.44%, Power Grid Corp up by 8.40%, Shriram Finance up by 6.18% and NTPC up by 5.78%. On the flip side, Eicher Motors down by 0.43% and LTIMindtree down by 0.40% were the only losers.

Asian markets are trading mostly in green; Nikkei 225 surged 455.3 points or 1.17% to 38,943.20, Hang Seng jumped 423.42 points or 2.29% to 18,503.03, Taiwan Weighted rose 404.4 points or 1.87% to 21,578.62, Jakarta Composite gained 97.6 points or 1.38% to 7,068.34, KOSPI increased 51.76 points or 1.93% to 2,688.28 and Straits Times was up by 14.32 points or 0.43% to 3,350.91, while Shanghai Composite was down by 15.79 points or 0.51% to 3,071.02.