Indian stock market benchmarks, the Nifty 50 and the Sensex, reached unprecedented heights in early trading on Monday, June 3, buoyed by multiple favorable factors.

This remarkable surge came on the back of promising exit poll results, robust GDP data, and a wave of investor confidence.

Exit Polls Signal Political Stability

The stock market rallied significantly after exit polls, released on June 1, indicated a strong likelihood of the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) securing over 350 of the 543 seats in the upcoming Lok Sabha elections. This prediction helped ease election-related anxieties, boosting market sentiment.

Market Performance Highlights

The Sensex opened 2,622 points higher at 76,583.29, a significant leap from its previous close of 73,961.31, eventually climbing to a new record high of 76,738.89. Similarly, the Nifty 50 began the day 807 points up at 23,337.90, rising to a peak of 23,338.70.

Investors engaged in aggressive buying across various segments, propelling the midcap and smallcap indices to fresh record highs, with each surging nearly 4%.

Key stocks, including SBI, ICICI Bank, Axis Bank, Bharti Airtel, Larsen and Toubro, Mahindra and Mahindra, NTPC, and Power Grid, reached new 52-week highs during intraday trading on the BSE.

Economic Indicators Fuel Optimism

The National Statistical Office (NSO) reported that India's GDP growth for the January-March quarter of FY2023-24 was 7.8%, with an annual growth rate of 8.2%, surpassing estimates. Additionally, the fiscal deficit for FY2023-24 was slightly better than anticipated at 5.63% of GDP, compared to the projected 5.8%.

These robust economic indicators, along with S&P Global’s recent upgrade of India’s rating outlook to positive and stable, provided substantial fundamental support to the market. "The GDP numbers were better than expected, which will bolster market confidence," noted V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Broad-Based Buying

The rally witnessed widespread buying, particularly in the banking, financial, metal, realty, and oil and gas sectors. The Nifty Bank index soared over 4% to a new high of 50,990, while the Nifty PSU Bank index surged nearly 7%. Realty, Metal, and Financial Services indices also experienced significant gains, each rising up to 4%.

Future Projections

"We anticipate Indian equities to continue their upward trajectory over the next few days," said Amit Goel, Co-Founder & Chief Global Strategist at Pace 360. "We expect the Nifty to reach approximately 23,200-23,300 levels during this period."

As the market continues to react positively to political and economic developments, investors remain optimistic about the future performance of Indian equities, bolstered by strong economic fundamentals and anticipated political stability.

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