The stock market experienced an unprecedented surge on Monday, reaching an all-time high after exit polls predicted a decisive victory for the BJP-led NDA coalition, fueling widespread investor optimism.
The Sensex soared by 1859.88 points, opening at a record 75,821.19, while the Nifty climbed 603.85 points, starting the day at 23,134.55. Remarkably, all 50 companies in the Nifty index saw advances, marking a rare and robust market performance. Top performers included Adani Ports, Adani Enterprises, Power Grid, Shriram Finance, and NTPC, which led the rally with substantial gains.
Investor sentiment was further bolstered by India's impressive Q4FY24 GDP growth of 7.8 percent, surpassing expectations and bringing the fiscal year's growth to a robust 8.2 percent. "Buoyant sentiments are driven by India's impressive Q4FY24 GDP growth of 7.8 percent, surpassing expectations, with the fiscal year's growth standing at 8.2 percent," said Varun Aggarwal, founder and managing director of Profit Idea. However, he cautioned that market volatility is anticipated as the final election results draw near.
The positive trend extended beyond Indian markets, with Asian markets reflecting similar optimism fueled by China's strong manufacturing data. Korea's Kospi surged 1.49 percent, Japan's Nikkei rose 1.13 percent, and Australia's ASX200 gained 0.82 percent. In the US, the Dow Jones and S&P 500 closed 1.51 percent and 0.80 percent higher, respectively, although the Nasdaq saw a slight decline.
Expectations of imminent rate cuts grew following a softer reading of the Federal Reserve's preferred inflation measure, further boosting Asian equities. Nonetheless, potential market volatility could arise from geopolitical tensions and the dynamics of the US election.
Oil prices are also on the rise, reflecting robust investor confidence, as demonstrated by the overwhelming demand for Saudi Aramco's $12 billion share sale. In Mexico, markets responded positively to projections of Claudia Sheinbaum's win for the ruling party Morena, suggesting continuity in governance.
Looking ahead, market participants are closely monitoring key economic indicators, including inflation prints across emerging markets and growth data from various regions. The European Central Bank's policy meeting and the release of the US jobs report are expected to provide further market insights.
This convergence of favorable domestic and international economic data, coupled with optimistic political forecasts, has set the stage for a dynamic and potentially volatile trading period as the final election results approach.