Exit Polls suggest NDA win | NIFTY to gap up

Exit Polls suggest NDA win | NIFTY to gap up | Vols could cool off

It will be an interesting start of the week for Indian Markets post the exit polls announcement. The Exit polls suggest a comfortable victory for the NDA. Even though the seat tally differs across various pollsters, there is consensus over an NDA victory with seats range seen between 342 to 385 on the lower end and 358 - 415 seats range on the upper end. There will be considerable euphoria in the markets when we open on Monday alongside the tailwind from positive US markets after benign PCE Readings. The buzz on social media if for Nifty to gap up towards the 23100 level. India VIX closed at 24.60 on Friday.

The low voter turnout had espoused uncertainty in the markets. The larger public mood has been for the NDA to win with domestic equity inflows during 2024 at over $ 7 bn per month in 2024. However, unlike earlier elections in 2014 and 2019 when we saw positive flows ahead of Elections, this time round FPIs have been net sellers CYTD to the tune of ~ $ 2.80 bn.

With Exit Polls broadly indicating an NDA win with wide margin, reckon India VIX to start cooling off from the current elevated levels of 24.80 with first support seen at 18.00. On Election day, which is 04th June, as the seat counting begins and the results start rolling in, there will be pockets when we get spikes in VOL which I think would offer good opportunity to square any long options position.

Once the Elections results are out and the hangover subsides, markets will start focusing their attention on the RBIs monetary policy, policies of the elected Government with continued focus on capital expenditure, infrastructure building, manufacturing and the full budget in July.

On Nifty, if we do get the opening as the buzz on social media suggests, immediate resistance will seen at 23180. Depending on where we open, levels to note are:

22780| 22920 | 23160

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