The Indian stock market experienced a significant surge, with Sensex and Nifty indices climbing over 3% by midday on June 3, buoyed by exit polls predicting a strong victory for the NDA government. This rally saw broad-based buying, with all 13 sectoral indices recording gains.
As of 12 PM, the Sensex had jumped 2,319 points or 3.1%, reaching 76,280, while the Nifty 50 had risen 697 points to 23,227. Advancing stocks outnumbered decliners with 2,390 shares up, 1,038 down, and 130 unchanged.
“The upcoming election results on June 4 could extend this rally if the NDA wins, while unexpected results might lead to market volatility,” noted Suman Bannerjee, CIO of Hedonova. The India VIX, a measure of market volatility, had eased by 18.3% to 20 by 12:05 PM.
The BSE Midcap index advanced 3.3%, and the BSE Smallcap index increased by 2%.
Sectoral Performance
All 13 sectoral indices were in the green. The top performers were the Nifty Oil & Gas, Nifty Realty, and Nifty Bank indices, each gaining between 4% and 5%. Nifty Pharma, Nifty Healthcare, and Nifty IT were the least strong performers, with gains of 0.5% to 0.7%.
Fundamental Analysis
Prashanth Tapse, Senior VP (Research) at Mehta Equities, credited the market rally to exit polls predicting a significant NDA victory, an impressive GDP growth of 8.2% for FY24, and a 570-point rise in the Dow Jones. Other contributing factors include the increased likelihood of a rate cut in September, early monsoon advancement, and a 10% increase in GST collections to Rs 1.73 lakh crore in May.
Technical Analysis
According to Anand James, Chief Market Strategist at Geojit Financial Services, the Nifty 50’s upper range is projected at 24,130 and the lower range at 20,930. For bearish momentum to take over, Nifty 50 would need to close below the 22,954-22,841 range, with subsequent support levels at 22,700, 22,550, and 22,300.
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