Markets to hit record highs for a third successive session after exit poll

The Indian markets continued their jubilation and surged to record high in last session, riding on the election euphoria. Today, the start is likely to be simply extension of the triumph boosted by exit polls predicting business-friendly opposition party BJP and its alliance winning in the elections. If the exit poll projections come true, India might be heading for a stable government under Narendra Modi. Traders may overlook the weak set of economic data announced after the market hours, as the Industrial production contracted for the second month running in March, while consumer inflation accelerated to a three-month high in April. IIP contacted 0.5% in March, compared with a 1.8% decline in February, while CPI inflation accelerated to 8.59% in April from 8.31% in March. Also, the rupee movement will be eyed as it had strengthened to a 10-month high in last session. Exporters fear that a further rise in rupee value could affect their competitiveness in the global market. However, the PSU oil marketing companies are likely to show some upmove, as the diesel prices have been raised by Rs 1.22 per litre after the end of elections, the biggest increase in the fuel price since September 2012. There will be lots of important result announcements too, to keep the markets buzzing. Ashoka Buildcon, Bank of Maharashtra, BoB, Dr Reddys Lab, Castrol India, Gujarat State Fertilizers, Nestle India, PNB, Tata Coffee, Tata Comm and West Coast Paper are among many to announce their numbers today. The US markets surged and the major averages ended the day firmly in positive territory, with the tech-heavy Nasdaq posting a standout gain. Traders took support from Chinese market reforms designed to increase liquidity. The Asian markets have made mostly a positive start with some gauges on course for their biggest increase in more than six weeks. The Chinese market was trading modestly higher ahead of retail sales and industrial output data. Back home, after scaling all-time closing highs in previous session, Indian equity benchmarks extended their jubilation on Monday with bull taking full control over the session ahead of exit poll results. Sentiments remained up-beat since beginning, as key bourses made a decent start and there appeared not even an iota of profit booking in the session with benchmarks fervently gaining strength to strength as investors continued hunt for fundamentally strong stocks. Frontline indices not only extended their rally for third straight day but also recorded their fresh all time closing high which they had witnessed never before, settling comfortably above their crucial 7,000 (Nifty) and 23,500 (Sensex) bastions as sentiments remained sanguine at the prospect of a Narendra Modi-led, stable government after May 16. The exit polls are expected to trickle in post 6:30 pm today. Some support also came after India’s trade deficit contracted to $10.01 billion in April as compared to $10.51 billion in the previous month and $17.67 billion reported in the corresponding month of the previous year. Further, foreign institutional investors (FIIs) remaining net buyers in Indian equities and buying shares worth a net Rs 1268.78 crore in the previous session, too aided the sentiments. Though, investors remained little cautious ahead of Consumer Price Inflation (CPI) data and Industrial Production data due later in the session, the latest one’s before the RBI’s next monetary policy on June 3. While, CPI is estimated to have quickened to 8.48 per cent in April from 8.31 per cent in March, factory output in March probably contracted for the fifth time in six months. On the global front, European counters traded mostly in the green in early deals. Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated in the rally. Finally, the BSE Sensex rushed by 556.77 points or 2.42%, to 23551.00, while the CNX Nifty surged by 155.45 points or 2.27% to 7,014.25.