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Most Indian Equities Advance Ahead of Election Results

Most Indian Equities Advance Ahead of Election Results

(Bloomberg) --

Indian equities rose ahead of the official outcome of national elections on Thursday, with nearly all exit polls projecting the re-election of Prime Minister Narendra Modi.

The S&P BSE Sensex gained 0.4% to 39,110.21 at the 3:30 p.m. close in Mumbai, while the NSE Nifty 50 Index gained 0.3% to 11,737.90.

The benchmark stock index yesterday retreated after closing at a record high on May 20 as exit polls pointed to another term of government by Bharatiya Janata Party and its allies, with a comfortable majority. The MSCI gauge of Indian shares trades at almost 18 times its estimated one-year earnings compared with the MSCI Emerging Market Index’s 11.6 times.

Most Indian Equities Advance Ahead of Election Results

Strategist View

  • The markets were quiet today ahead of “the main event tomorrow,” said Avinash Gorakshakar, head of research at Mumbai-based Joindre Capital Services Ltd.
  • If the Modi-led coalition crosses the 300-seat mark tomorrow, Nifty may touch 12,000, Gorakshakar said. “We will see a mild sell-off if the seat count is 220 to 250, but a massive one if they fall below 200.”

The Numbers

  • Fifteen of the 19 sector indexes compiled by BSE Ltd. advanced, led by a gauge of banks.
  • Twenty-five of the 31 Sensex members and 33 of the 50 Nifty companies gained.
  • IndusInd Bank Ltd. rose the most among Nifty members, climbing 4.9%. The lender’s January to March net income lagged behind analyst estimates after it said about 30 billion rupees ($431 million) of loans to defaulter IL&FS group turned bad.
  • Dewan Housing Finance Corp. fell 9.5%, the steepest on S&P BSE 200 and S&P BSE 500 indexes. The mortgage lender has stopped accepting fresh deposits after a debt rating downgrade.
  • A BSE gauge of mid-sized companies retreated 0.2%, a second straight day of fall. The S&P BSE SmallCap Index gained 0.5%.
  • Net incomes at 25 of the 39 Nifty companies that have reported earnings so far have either topped or met the analyst estimates, according to data compiled by Bloomberg.
  • The NSE Volatility Index climbed 7.7%, extending its two-day advance to 17%.

Analyst Notes/Market-Related Stories

  • Modi Exit Poll Euphoria Fades for Rupee as Challenges Loom Large
  • Modi Win Not Enough for Pictet Asset to Buy More Indian Stocks
  • JPMorgan Sees Value in Some India Bonds if Exit Polls Prove True

To contact the reporter on this story: Ameya Karve in Mumbai at akarve@bloomberg.net

To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Margo Towie, Anto Antony

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