Market back to pre-exit poll levels

Around 23 Sensex stocks and 36 Nifty stocks are trading higher than before the exit polls Among Nifty blue chip stocks, Hindustan Unilever leads with a gain of over 9 percent from its exit poll level, followed by Hero MotoCorp with an 8 percent gain

In a swift bounce-back following the carnage of June 4, the stock market has recouped all losses with the total market cap of all listed companies climbing to Rs 421.47 lakh crore on June 7, which was above the aggregated market cap recorded on May 31, the day before the exit poll-led big surge.

Currently, the Sensex and Nifty are trading at 76,400 points and 23,200 points, respectively, versus pre-exit poll levels of 73,961 and 22,530 points, respectively. The flagship indices are respectively just 300 points and 100 points away from their June 3 levels.

Twenty-three of the 30 Sensex stocks and 36 of the 50 that make up the Nifty are trading higher than before the exit polls Among Nifty blue-chip stocks, Hindustan Unilever leads with a gain of over 9 percent from its exit poll level, followed by Hero MotoCorp with an 8 percent gain. Mahindra & Mahindra, Tata Consumer Products, Tech Mahindra and Bajaj Auto are also up over 7 percent each.

On the downside, PSU stocks and Adani Group stocks are the top laggards. BPCL leads the losers, down 7 percent, followed by Adani Enterprises and Adani Ports & SEZ, which fell by 6.6 percent and 5.9 percent, respectively, from exit poll levels. L&T is down 5 percent, while ONGC and Coal India are down nearly 4 percent each. Power Grid Corp and NTPC are both down around 3 percent.

Out of the 2235 stocks listed on NSE, 1113 are trading higher than before the exit polls, while the remaining 1122 are still below exit poll levels. Among them, 71 stocks are trading over 10 percent higher, 196 stocks are trading higher between 5-10 percent, and 846 stocks are trading between 0-5 percent higher.

markets

Thirty-six stocks are trading over 10 percent lower, 232 stocks have lost between 5 and 10 percent, and 854 stocks are down by 0.5 percent or lower.

"This is not surprising at all. The market's reaction on election day stemmed from nervousness, with doubts about the BJP's ability to retain power. However, these speculations proved wrong, as the reality is that the NDA is forming the government and coming into power," said Deven Choksey, managing director of DRChoksey FinServ.

Choksey said the NDA forming the government resolves uncertainties, leading to a positive market sentiment. He emphasised that economic fundamentals remain stable and that market valuations are still relatively high.

Choksey believes that negative perceptions about valuations are yet to develop, as investors continue to have faith in growth and earnings prospects. He highlighted factors such as 8 percent GDP growth, 4.5 percent inflation, and 18-20 percent corporate earnings growth as supporting the market's upward trajectory in the coming years. He underlined the importance of watching the implementation of policy reforms going forward.

Among sectoral indices, the Nifty FMCG leads as the biggest gainer, up over 6 percent from exit poll levels, followed by the Nifty IT and Auto, each up nearly 5 percent. Nifty Consumer Durables, Healthcare and Realty are up between 2 and 4 percent. On the flip side, Nifty Energy is the top loser, down 2.3 percent, followed by Nifty CPSE and Nifty Oil & Gas, down 4 percent and 1.5 percent, respectively. Nifty Infra and Metal indices are down around 1 percent.

Since the exit polls, foreign investors have sold around Rs 10,000 crore in local equities, while domestic institutional investors have bought around Rs 7,000 crore in local equities.

Gaurang Shah, senior vice-president at Geojit Financial Services, stated that market recoveries are expected after events like elections and exit polls as they have occurred before and will happen again. He stressed that markets ultimately focus on fundamentals. While the recent event holds some significance, it's not the only factor at play.

He noted the possibility of NDA partners joining the government post-election, which could further benefit the market. Looking ahead, Shah highlighted upcoming triggers such as the monsoon, earnings, budget and global data. He suggested that any market corrections could present buying opportunities.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.