Markets hit record highs, more outperformance ‘if’ exit polls prove right: Brokerages

MUMBAI: Markets hit record highs on Tuesday’s openning session extending their rally for the second day running as the BSE Sensex rose over 100 points to an all-time high of 39,571.73 in early trade.

The Sensex touched a fresh life time high of 39,571.73 during the opening session of the trade on Tuesday.

At 9.29 a.m., it was trading at 39,463.23, up 110.56 points or 0.28 per cent after it opened at 39,449.45 from its Monday’s close of 39,352.67.

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The Nifty was trading at 11,855.15, over 26 points or 0.23 per cent higher. It opened at 11,863.65 after closing at 11,828.25 on Monday.

Indian markets will move further ahead if the exit polls prove right, but investors must still be cautious till May 23 as exit polls have a mixed record, said various brokerage firms.

“Exit polls have a mixed record, so the real deal is still May 23 when the actual results will be available,” Morgan Stanley said. On a similar note, HSBC said that the past polls have had a patchy record, and the Uttar Pradesh outcome remain uncertain.

“While mostly all exit polls this time are directionally speaking the same tune, we note that historically, exit polls have shown lack of accuracy in seat predictions and even in trend predictions,” said Madhavi Arora, Economist, FX & Rates, Edelweiss Securities Ltd.

“For instance, the 2004 exit polls depicted a NDA victory, but the actual outcome showed the Congress turning out to be the single largest party and formed the UPA alliance,” she added.

Nomura said that the exit polls suggest a better-than-expected result for the NDA, but near-term growth risks remain.” Do not foresee a major reversal of the current (weak) economic conditions in the short-term,” the brokerage said.

JPMorgan said that a stronger victory for the NDA, beyond 290 seats, could trigger a more robust response (3-5 per cent) but any slippage in the number of seats for the NDA would trigger a negative reaction.

IANS inputs

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