The exit polls suggest that the ruling National Democratic Alliance (NDA) is poised to return with thumping majority. The markets have no doubt given a thumbs up in terms of the broad-based rally seen across indices. Projections indicate that the NDA could secure approximately 370 seats, compared to the 353 seats it won in 2019, based on the average of all exit polls.
However, the question remains that what does it mean for the average investor. How does the incumbent government if voted back to power impact the prospects of the investor? Various brokerages have shared their predictions and top sectoral bets. Here is a quick overview-
Here’s what brokerages say on markets after Exit Polls
Nomura
According to a Nomura report on exit polls, the equity market is expected to react positively if the exit poll results translate into actual results. The report suggests that foreign institutional investor (FII) flows will improve if the NDA forms a stable government as predicted. Additionally, infrastructure, manufacturing, and capital expenditure (capex) sectors are anticipated to outperform in the near term.
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Jefferies
According to a Jefferies report on exit polls, the numbers shown are higher than expectations and will be sentimentally positive for capex stocks if the actual results mirror the exit polls. The report also notes that small and mid-cap stocks (SMID caps) could take a near-term breather following the election rally.
Bernstein
According to a Bernstein report on exit polls, if the trends seen in the exit polls translate into actual results on Tuesday, a continuation of the relief rally could occur, with the market briefly touching 23.5k before profit booking sets in. The report also indicates that a greater margin of victory may increase the magnitude but not the duration of the rally.
Kotak Institutional
According to a Kotak Institutional report on exit polls, the government is likely to focus on investment-led growth. The report finds most sectors and stocks to be overvalued relative to their fair value. Additionally, a large BJP victory may sustain rich-to-bubble multiples in parts of the market.
Motilal Oswal
According to a Motilal Oswal report on exit polls, a victory for PM Modi and the BJP bodes well for the economy and capital markets. The report notes that India is fundamentally experiencing its own mini-Goldilocks moment. Their model portfolio remains aligned with key domestic cyclical themes. They maintain an overweight position on financials, consumption, industrials, real estate, and PSU banks.
Top ideas in large caps include ICICI Bank, SBI, L&T, Coal India, M&M, Adani Ports, ABB, HPCL, and Hindalco. In midcaps, their top picks are Indian Hotels, Godrej Properties, Global Health, KEI Industries, PNB Housing, Cello World, and Kirloskar Oil.
IIFL Sec
According to an IIFL Sec report on exit polls, if PM Modi is re-elected, there could be attempts at accelerated reforms. The key sectors in focus are electricity and agriculture.
The report is positive on sectors such as infrastructure, cement, private banks, NBFCs, and select industries. However, it is negative on IT and chemicals, and neutral on most consumer sectors. Come from Sports betting site VPbet