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Post-result market outlook: 5 sectors likely to benefit if NDA returns

Not only did Monday's upward rally make stock market investors significantly richer but also gave an idea about sectors that could get a massive boost from another NDA term. 

Post-result market outlook: 5 sectors likely to benefit if NDA returns

Not only markets but some sectors are also expected to benefit if the Narendra Modi-led NDA returns to power. (Photo: Reuters)

A day after the exit poll results predicted a massive victory for the Narendra Modi-led NDA government, domestic equity markets registered one of its best 1-day runs in several years.

Not only did Monday's upward rally make investors significantly wealthier but also highlighted the sectors that could get a massive boost from another NDA term.

On Monday, shares of many sectors including infrastructure, power, NBFCs, capital goods, and construction jumped significantly as euphoric investors danced to the tune of exit polls. All of these sectors are likely to benefit if the NDA government returns after May 23.

Some of the top gainers in the Sensex pack on Monday included several banking stocks including State Bank of India, Yes Bank, ICICI Bank, IndusInd Bank, and Axis Bank-an indication that banking stocks may continue upward trend if Narendra Modi comes to power again.

Larsen and Toubro, Tata Motors, ONGC, Maruti, M&M, Reliance Industries Limited, Hero MotoCorp, Vedanta, Asian Paints, Tata Steel, and Bajaj Finance also gained up to 7 per cent yesterday.

There was a sharp uptrend in equities and the market capitalisation of BSE-listed companies jumped by 5.33 lakh crore a day after the poll predictions were revealed.

Market research firm UBS Securities said markets--especially some of the stocks which gained massively after the exit poll results--may continue an upward rally if the BJP emerges as the single largest party.

Since the BJP's election manifesto is focused on infrastructural development, analysts expect investors to buy such stocks heavily if the NDA returns to power after May 23.

While all the aforementioned sectors are expected to continue an upward rally in case of an NDA re-run, the same cannot be said for export-heavy sectors like Information Technology and pharma.

Analysts also warned investors that not all the sectors may rally as expected, considering the economic weakness due to both domestic and external factors. Worth noting that analysts are especially optimistic about the banking sector and infra stocks on a near-term basis.

While markets rallied exponentially on Monday after exit poll results, it may not perform so well after the actual results are out, indicated market experts and advised market participants to tread carefully.

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