Stock markets may stage a rally on Monday

Banks, auto, defence shares to run amock

Mumbai: Stocks, bonds, and currency markets would stage a rally on Monday as all major exit poll surveys predict a landslide victory for the ruling Bharatiya Janata Party led by Prime Minister Narendra Modi.

The predictions are expected to bring the much-needed calm to stock markets rattled by the volatility triggered by the apprehension that the BJP might fail to get the magical number of 272 (50 per cent of total seats of 543) required to form the government due to the low voters turnout in all seven phases and tight races in all most all states.  

A thumping majority will give the confidence to Modi to push through policies that are seen as crucial for boosting India’s economic growth, which is already among the world’s fastest.

If the results on June 4 align with the exit polls, the analyst expects the NSE Nifty 50 index to scale a new peak. Last week, the index slid nearly 2 per cent to 22,531 points as foreign investors treaded cautiously ahead of the election outcome.

“Foreign investors will need to cover short positions quickly,’’ says an analyst. “Margin calls on short positions may lead to the market spiking beyond 23,000 on Monday, a new high, and close to 23,500 on June 4^th if the numbers for the ruling alliance are above 350, he added.

Analysts are of the view that bank, auto, defence stocks may witness a `Modi rally’’ on Monday