The Gift Nifty was trading at 23,353 points as of 7:05 a.m. IST, indicating that the Nifty 50 will open higher than its Friday’s close of 22,530.70.
The Nifty 50 and S&P BSE Sensex dropped about 2% each last week ahead of the election result, which is due on June 4.
Exit polls released on Saturday projected the Bharatiya Janata Party-led National Democratic Alliance will likely get a two-thirds majority in the 543-member lower house.
The polls followed the end of voting in India’s six-week long general election where campaigning turned divisive, focused on religion and caste. Exit polls in India have a patchy track record but will nevertheless boost market sentiment, analysts said. “The exit poll numbers are very strong for the incumbent government,” said Narendra Solanki, head of fundamental research of investment services at Anand Rathi Shares and Stock Brokers. “Markets may not have priced in such strong numbers and we could see some reflection of that in today’s trading session,” added Solanki.
Foreign investors, who sold a net amount of $3 billion of Indian stocks in May, could also step up purchases, they said.
These investors net bought shares worth 16.13 billion rupees (about $193 million) on Friday, while domestic institutional investors purchased 21.14 billion rupees in stocks.
“Short covering by foreign investors is very likely, they are net short on Indian equities. Till they are net long, they will continue buying and that can spur a rally,” said Neeraj Dewan, director at Quantum Securities.
An incoming government will likely focus on manufacturing, capex and infrastructure creation, Motilal Oswal said in a note over the weekend.
Data released after market hours on Friday, which showed the economy grew a better-than-expected 7.8% in the January-March quarter, could also aid sentiment, said Solanki.
($1 = 83.4240 Indian rupees)