"Modi's Landslide Victory" Exit Poll Results Send Indian Stock Market to an All-Time High

Prime Minister Modi's BJP Expected to Win 365 of 543 Seats
Nifty50 and Sensex Rise 3% to Record Highs
Infrastructure Development Boost Spurs Related Stocks Rally

The Bharatiya Janata Party (BJP), led by Indian Prime Minister Narendra Modi, achieved a landslide victory in the general election according to exit polls, driving the Indian stock market to reach an all-time high.

On the 3rd (local time), according to CNBC and others, the benchmark indices of the Indian stock market, the SENSEX and the NIFTY 50?which tracks the stock prices of 50 large-cap companies?rose by 3.39% and 3.25% respectively compared to the previous session, closing at record highs. Both indices recorded their highest intraday gains since February 1, 2021.

[Image source=Reuters Yonhap News]

This bullish trend in the Indian stock market is interpreted as a positive reaction to the recently announced exit poll results of the Indian general election. According to a summary of exit polls by the local news channel NDTV, the National Democratic Alliance (NDA), led by Modi’s BJP, is projected to secure about 365 out of 543 seats in the Lok Sabha, achieving a majority. If these exit poll results hold true in the final results to be announced on the 4th, Modi will serve an additional five years as Prime Minister, a position he has held since 2014.

The market had long anticipated Modi’s third term. Over the past decade under Modi’s government, India has risen to become the world’s fifth-largest economy, supported by solid economic growth. In the 2022?2023 fiscal year, India achieved a 7.2% growth rate compared to the previous year, ranking second highest among G20 countries. The economic outlook remains optimistic. Susan Hazra, Chief Economist at Anand Rathi Share and Stock Brokers, stated, "Although it becomes more challenging to maintain high growth rates as the size of the economy increases, (India) is expected to achieve growth of 7 to 7.5%." She added that improving infrastructure will be the top priority to promote growth.

The market’s expectation that the next Modi government will prioritize India’s infrastructure development was reflected in the stock market on the same day. Shares of Adani Ports and Adani Power, part of the Adani Group which focuses on infrastructure projects such as port and airport management, power, and mining development, surged 10% and 16% respectively, leading market sentiment. Ambuja Cement, a major Indian cement company, also rose nearly 6%. Key financial stocks, including the State Bank of India, rallied with gains in the double digits.

Sunny Agarwal, Head of Equity Research at SBICAPS Securities, said, "This exit poll result has boosted investor sentiment toward Indian equities," and added, "Once the final results are announced, foreign investors are expected to turn into buyers of Indian stocks." Malcolm Dawson, Senior Portfolio Manager at Global X ETFs, forecasted, "We will see continued infrastructure development in housing, transportation, and digital sectors."

Meanwhile, India conducted the world’s largest general election over approximately six weeks starting April 19, with 642 million people participating in the vote. Following the announcement of the exit polls, Prime Minister Modi celebrated on social media, stating, "The people of India showed a record voter turnout for our re-election." The official election results are scheduled to be announced at around 11:30 a.m. Korean time on the 4th.