Verdict Of India – 2024, Who Will Rule Dalal Street- Bulls or Bears?

Shares of Public Sector Undertakings (PSUs) have been at the forefront of this market rally


Exit Polls are already out, with all of them giving the BJP and the NDA a clear cut verdict –

IMAGE COURTESY : DECCAN HERALD tries to decode the direction Indian stock market would be taking, in all possible scenarios, as the entire opposition has termed the Exit Polls as “fake”.

The Indian stock market is experiencing a significant rally, driven by the latest exit polls projecting a landslide victory for the BJP-led National Democratic Alliance (NDA) in the upcoming general elections. This wave of optimism has invigorated investor sentiment, leading to a notable surge in Public Sector Undertaking (PSU) stocks, among others.

Sensex, Nifty hit new all-time

The Sensex and Nifty reached new all-time highs as exit polls predicted a decisive victory for Prime Minister Modi in the upcoming elections. This surge in investor confidence was further bolstered by the Bank Nifty, which surpassed the 51,000 mark for the first time. The market’s optimistic response reflects expectations of continued economic reforms and political stability under Modi’s leadership, which are anticipated to drive growth and attract further investments, particularly in sectors such as banking and manufacturing.
Sensex surges 2,507 points to 76,469 & Nifty 733 points to 23,264 at close of markets today, i.e. June 03, 2024
⦁ 4 of 5 top Nifty gainers as PSUs (Power Grid, NTPC, SBI & ONGC)
⦁ Oil & Gas stocks rise on an expectation of sector to brought into GST ambit
⦁ Power financiers see a big move as well, PFC & REC up 12% each
⦁ CONCOR is amongst top PSU gainers, closes with a gain of 10%

The Surge in PSU Stocks

Shares of Public Sector Undertakings (PSUs) have been at the forefront of this market rally. Stocks of government-owned companies, particularly in sectors such as energy, banking, and infrastructure, have seen significant gains. Key reasons for this surge include:

  1. Privatization and Disinvestment Plans: The current government has been vocal about its plans to privatize and disinvest in several PSUs, aiming to reduce fiscal deficits and improve efficiency in these entities. Investors are optimistic that a continued NDA government will accelerate these plans, unlocking value in these companies.
  2. Policy Continuity: A stable government is expected to continue with policies favoring PSUs, including measures to improve their operational efficiencies and financial health. This anticipated continuity has boosted investor confidence in these stocks.
  3. Economic Reforms: The BJP-led government is known for its reform-oriented approach, which includes initiatives like the Goods and Services Tax (GST), labor law reforms, and ease of doing business. Such reforms are expected to benefit PSUs significantly.

Exit Polls and Market Sentiment

Exit polls, conducted immediately after voters leave polling stations, provide an early indication of the likely outcome of an election. In the recent exit polls, the BJP-led NDA is predicted to secure a commanding majority. At least three of them are projecting the NDA to snag as many as 400 seats, a forecast that happens to match the slogan given by Home Minister Amit Shah, Modi’s No. 2. This has been interpreted by the market as a signal of political stability and policy continuity, fostering a conducive environment for economic growth and reforms.

Investors are buoyed by the prospect of a stable government which is expected to continue with its reformist agenda, focusing on infrastructure development, tax reforms, and the privatization of state-owned enterprises. This anticipated political stability and pro-business stance have led to a bullish sentiment in the stock market.

Historical Perspective: When Exit Polls Go Wrong

While exit polls provide a snapshot of voter sentiment, they are not always accurate. There have been instances in the past where exit polls have significantly diverged from actual election results, leading to market volatility. For example:

⦁ 2015 Delhi Assembly Elections: Exit polls predicted a close contest between the Aam Aadmi Party (AAP) and the BJP, but the actual results saw a landslide victory for AAP.
⦁ 2004 General Elections: Most exit polls forecasted a win for the incumbent NDA government, but the results favored the Indian National Congress-led United Progressive Alliance (UPA).

Such discrepancies between exit polls and actual results can lead to sharp corrections in the stock market. If the exit polls’ predictions do not materialize, the market could witness heightened volatility and a possible downturn, as the current rally is heavily based on the anticipated political stability and continuation of the current economic policies.

Risks and Considerations

Investors need to be cautious and consider the inherent risks associated with exit polls:

  1. Market Volatility: Given the reliance on exit polls, any deviation in actual results could lead to significant market volatility.
  2. Overvaluation: The current rally, driven by optimism, may lead to overvaluation of stocks, particularly PSUs. Investors should be wary of investing based on speculation rather than fundamentals.
  3. Global Factors: While domestic political stability is crucial, global economic factors such as oil prices, geopolitical tensions, and trade policies can also impact the Indian markets.

Expert Views spoke to Geetu Moza, Consulting Editor, Jagran Business on the euphoria on Exit Polls and volatility expected tomorrow. Ms. Moza said “today, the markets soared to new highs, driven by euphoria over the exit polls. Significant buying activity was observed from domestic ETFs, although Foreign Institutional Investors (FIIs) remained on the sidelines, awaiting the final outcome. Public Sector Undertaking (PSU) stocks experienced a frenzy, with most closing with substantial gains. Looking ahead to tomorrow, expect volatility with an overall uptrend still intact. If NDA crosses the 400 mark, anticipate an additional 3-4% surge. If the results align with predictions, we might see a range-bound session with some profit booking towards the end. Conversely, if the outcome is less favorable for the NDA, the markets could face sharp declines. Be prepared for potential market fluctuations”.


The Indian stock market’s rally, driven by exit polls projecting a decisive win for the BJP-led NDA, underscores the influence of political stability on investor sentiment. The surge in PSU stocks highlights the optimism surrounding continued reforms and privatization efforts. However, the historical inaccuracy of exit polls serves as a reminder for investors to exercise caution. As always, a balanced approach, focusing on fundamentals and considering broader economic factors, is essential for navigating the markets during such politically charged times.

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