The Indian markets jumped in the early trade today as the exit polls after the seven-phase of polling concluded last evening showed a trend of Narendra Modi returning as the prime minister for the second time.
Sensex opened at 38,819.68, up by 888.91 points while the Nifty opened at 11,691.30, up by 284.15 points.
After the elections concluded last night, most exit polls suggested that the BJP-led NDA government will come back at the centre, forming a decisive government. Analysts have suggested that the share market may hit its highest later in the trade today while it may just cross the psychological mark of 40,000 points soon.
The Indian Rupee, too, jumped against the US Dollar and rose to a two-week high of 69.36 against the USD as compared to Friday’s close of 70.23. Stock market experts believe that the exit poll results were better than expected which is being reflected in the stock market.
A surging stock market is considered the hope an investor has in a stable government. As per reports, NDA losing the Lok Sabha elections would have meant uncertainty in politics which usually spooks the investors.
In 2004, markets had gained in the pre-poll rush, in hopes of a second term of BJP under Atal Bihari Vajpayee, but the markets crashed soon after the results were out. In fact, back then it had reached the all-time high of 6,250 points but lost almost 2,000 points by mid-May. However, a few days later when the Congress-led UPA came to power and the BJP conceded defeat, the Sensex fell by 842 points, showing instability in the markets.