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Indian markets clocked their biggest one-day rally and ended with gains of over 3% each on Monday as exit polls for the 2024 Lok Sabha elections suggesting a comfortable majority for the BJP-led NDA. Today, markets are likely to continue the previous session’s rally with optimistic start amid anticipation surrounding the Lok Sabha 2024 election results. Vote counting begins at 8 am and a clear trend should emerge by noon. A summary of exit polls project the NDA could win between 355 and 380 seats in the 543-member lower house of parliament. Also, a sharp fall in crude oil prices overnight likely to support Indian markets. Foreign fund inflows likely to aid domestic sentiments. After having net sold stocks to the tune of Rs 42,200 crore in the month of May, foreign institutional investors (FIIs) net bought shares worth Rs 6,851 crore on Monday, in the first trading session of June. Some support will come with a private report that strong growth and a narrower fiscal deficit can lead to a sovereign rating upgrade for India. it said the government's commitments on fiscal deficit to 5.1 per cent in FY25 and further down to 4.5 per cent in FY26 look more credible now, and pointed out that the number came in at 5.6 per cent in FY24 as against the budgeted 5.8 per cent. However, there may be some cautiousness as S&P Global Market Intelligence asserts that weak private consumption in India remains the largest concern, with rural demand in particular still straggling to catch up, at a time when the country's overall growth remains strong. For the second consecutive quarter, India's real GDP growth exceeded most forecasts, bringing the full financial year 2023-24 growth to 8.2 per cent. With this, India maintains its status of the world's fastest-growing large economy. Meanwhile, the capital markets regulator Sebi introduced a mobile app designed to demystify personal finance for investors with a suite of comprehensive tools. Coal industry stocks will be in focus as the Coal Ministry's provisional data showed that the country's coal production rose by 10.15 per cent to 83.91 million tonnes (MT) in May compared to 76.18 MT in the year-ago period. As per the data, coal production by state-owned CIL rose by 7.46 per cent to 64.40 MT in May compared to 59.93 MT in the year-ago period. There will be some reaction in port and shipping industry stocks with report that cargo traffic across 12 major ports in the country increased by 3.75 per cent year-on-year in May to 72.04 million tones (MT) from 69.43 MT handled in the corresponding month of 2023 with nine such ports showing positive growth.

The US markets ended mostly higher on Monday with marginal gains as weaker-than-expected manufacturing numbers sparked debate over likely Fed rate cut bets. Asian markets are trading mostly lower on Tuesday following the mixed cues from Wall Street overnight, with weakness across most sectors led by Index heavyweights and technology stocks.

Back home, Indian equity markets skyrocketed remarkably on Monday, banking on exit poll predictions of continuity and political stability. The exit polls predicted a historic third term for Prime Minister Narendra Modi. The start of the day was on strong note, as positive global cues on the back of encouraging inflation data from the U.S., robust Indian GDP data for the fourth quarter of FY24 and foreign fund inflows boosted investor sentiment. Foreign institutional investors (FIIs) bought shares worth Rs 1,613.24 crore on May 31, while India's Q4 GDP grew 7.8 per cent, beating estimates. Bulls held a tight grip over the Dalal Street during the whole day, as the government data showed that India’s goods and services tax (GST) collection in May rose 10 per cent year-on-year (Y-o-Y) to Rs 1.73 trillion, taking overall collection to Rs 3.83 trillion so far in the current financial year (FY25). Besides, the growth of eight core industries rose to 6.2% in April from 6% in March, mainly due to higher growth achieved in natural gas, refinery products, coal, steel and electricity sectors. Sentiments remained optimistic as Prime Minister Narendra Modi said that the Q4 GDP growth data for 2023-24 shows robust momentum in Indian economy which is poised to further accelerate. Adding more relief among traders, India’s fiscal deficit - the gap between expenditure and revenue - came in at 5.6% of the Gross Domestic Product (GDP) in FY 2023-24 (FY24), lower than the revised estimate (RE) of 5.8%, amid higher revenue realisation and lower expenditure. Traders overlooked reports that India's manufacturing sector growth eased further in the month of May, signaling a slower but still substantial improvement in the health of the sector. The headline figure was nearly four points higher than its long-run average. According to the survey report, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) eased to 57.5 in May as against 58.8 in April. It was 59.1 in March. Finally, the BSE Sensex zoomed 2507.47 points or 3.39% to 76,468.78, and the CNX Nifty was up by 733.20 points or 3.25% points to 23,263.90.

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