A range of exit polls released on Saturday predicted a huge election victory for India’s incumbent Prime Minister Narendra Modi — projections which analysts say could trigger a rally in the country’s stock markets.
A summary of six television news exit polls projected a majority win for the ruling National Democratic Alliance (NDA), ahead of the counting of votes on June 4.
Those projections are likely to boost India’s financial markets when they reopen on Monday.
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Market analysts say the exit polls lifted uncertainty about the likely result and signalled the continuity of Modi’s economic policies.
“Exit poll results… completely remove the so-called election jitters which have been weighing on markets in May,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
“This comes as a shot in the arm for the bulls who will trigger a big rally in the market on Monday,” he said.
Indian markets have been on strong footing, seeing gains of nearly 9% over the past six months. India’s benchmark Nifty 50 hit a fresh all-time high in May, but quickly corrected nearly 2% amid uncertainty around the election result.
Foreign investors also sold about $2.6 billion of Indian equities in May, on a net basis, as of May 29.
Fund managers predicted some market volatility in case of a lower margin of victory for Modi and a sharper correction in case he loses, due to policy uncertainty.
A strong win for Modi, however, would trigger a short-term boost to Indian markets, they said. Raamdeo Agrawal, chairman and co-founder of brokerage Motilal Oswal Financial Services said Modi’s win will boost shares of defence, infrastructure, railway and capital goods companies.
‘This is a government exit poll’
A victory for 73-year-old Modi will make him only the second prime minister of India, after independence leader Jawaharlal Nehru, to win three consecutive terms.
For a simple majority, the NDA alliance or the opposition “INDIA” alliance need to win 272 out of 543 seats on which elections were contested.
Exit polls have projected the NDA alliance to bag between 355 and 380 seats — a number that will give the Modi government two-thirds majority, and the power it sought to usher in far-reaching amendments in the Indian constitution.
But exit polls, which are conducted by polling agencies, have a patchy record in India and have often got the outcome wrong. Analysts say it is a challenge to get them right in the large and diverse country.
Meanwhile, the opposition, led by the Indian National Congress, dismissed the exit polls.
“This is a government exit poll, this is Narendra Modi’s exit poll,” Supriya Shrinate, the Congress’s social media head, told news agency ANI. Most opposition parties accuse India’s main news channels of being biased in favour of Modi, charges the channels deny.
“We have a sense of how many seats we are winning, it will not be one seat less than 259,” Shrinate said.
- Reuters, with additional editing by Vishakha Saxena
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