New Delhi: Indian stocks are likely to witness extreme volatility during the trading week beginning Monday amid exit polls and election outcomes, after key indices Sensex and Nifty touched record highs Friday.
A big volatility in the equities markets is expected Tuesday, a day after the exit poll projections will be announced, analysts said.
The polling process for 543 parliamentary seats ends Monday, with election in 41 constituencies. This will mark the culmination of a five-week-plus election process to elect the 16th Lok Sabha.
The Indian stock markets key indices Sensex and Nifty soared to record highs Friday, on the back of optimism that the Narendra Modi-led Bharatiya Janata Party (BJP) would be able to form a stable government post general elections.
“As the election D-day is approaching closer, the markets are rallying on anticipation of a favourable outcome,” said Dinesh Thakkar, chairman and managing director of Angel Broking.
“In spite of the rally so far, most cyclical sectors are still trading well below their average valuations, and in a longer economic upturn scenario, valuations still leave enough room for healthy upsides as GDP growth and consequently earnings growth in cyclical sectors continues to improve,” Thakkar said.
The 30-scrip S&P Sensex (sensitive index) of the Bombay Stock Exchange (BSE) soared past the 23,000-point mark for the first time and hit a record high of 23,048.49 points in the intra-day Friday, surpassing its previous record of 22,912.52 points hit April 23.
The benchmark Sensex closed 650.19 points or 2.91 percent higher at 22,994.23 points.