Stock market, Modi rally: Sensex, Nifty soar, BSE m-cap jumps Rs 12L cr; India VIX plunges 20%

The BSE Sensex climbed 2,777.58 points to hit an all-time high of 76,738.89, as exit polls predicted third term for the incumbent BJP. Nifty too hit its record high of 23,338.70. It was later trading at 23,182.45, up 651.75 points or 2.89 per cent.

The broad-based Modi rally that pushed the BSE Sensex and the NSE Nifty to fresh record highs today added nearly Rs 12 lakh crore to the BSE market capitalisation (m-cap). At roughly $5.09 trillion, the BSE m-cap surged to 4,23,71,233 crore today from Rs 4,12,12,881 crore on Friday, even as the equity benchmarks trimmed gains, as the session progressed.

The BSE Sensex climbed 2,777.58 points to hit an all-time high of 76,738.89, as exit polls predicted third term for the incumbent BJP. Nifty too hit its record high of 23,338.70. It was later trading at 23,182.45, up 651.75 points or 2.89 per cent. Fear gauge India VIX, which suggests the likely volatility in market over the next 30 days, plunged 20 per cent to 19.2 per cent, as political uncertainty subsided.

Almost all exit polls predicted the BJP-led NDA’s seat wins in the 350-400 range, which was largely similar to opinion polls. Stock investors had, over the last six weeks, trimmed expectations on BJP or NDA seat counts, following lower turnout in the first few phases of Lok Sabha elections 2024. The exit poll predictions, thus, came in as a positive surprise.

“We expect the equity market to react positively in the near term in case the exit poll results translate into actual results on 4 Jun 2024. The market movements in the past elections suggest that the market tends to do well going into the election and after the
election the returns tend to be relatively lower. We note that unlike in the past elections, the outperformance of Indian equity markets to other benchmark indices such as the S&P and MSCI EM is lower this time,” said Nomura India.

Kotak Institutional Equities said it finds very little value in the market and, in fact, find most sectors and stocks overvalued relative to the fair value of the stocks, with the extent of overvaluation increasing in the inverse order of market capitalization, quality and risk.