Markets await final showdown of Exit poll Vs Reality

BSE Sensex has registered a 3 per cent gain since exit poll predicted BJP's victory. From last Friday, May 17 onwards, Indian equity markets have gained points in anticipation of a victory for the ruling BJP alliance NDA and Narendra Modi being Prime Minister for the second time. The market has registered a 3.01 per cent (1,616.21‬ points) gain if we compare Friday's opening of 37,494.42 to Wednesday's (May 22) close of 39,110.21, assuming that pollster’s forecast triggered the market rally. The positive sentiments stem from the results of multiple exit polls conducted by various media houses in association with the country's leading psephologists. 

On Wednesday, BSE Sensex traded in green throughout the day and closed at 39,110.21, up by 140.41 points or 0.36 per cent and Nifty ended at 11,737.90, up by 28.80 points or 0.25 per cent.

Most exit polls give BJP-led NDA a clear majority. The total winning seat count for NDA differs by a huge range of 242 to 365 seats. The only consensus among pollsters is that BJP will make for its seat losses in UP and western region with newfound gains in Eastern states. 

Meanwhile, the opposition parties are rejecting the exit polls and going ahead with talks to form a coalition government. Prominent opposition leaders Chandrababu Naidu, Deve Gowda are in talks for a post-poll alliance, while parties like Naveen Patnaik-led Biju Janata Dal have expressed that they will support whoever forms the government in the center. 

Just in case, the results in reality are far different than predicted by pollsters and NDA fails to get a clear majority, leaders like Mayawati, Akhilesh Yadav, Mamata Banerjee, Chandrababu Naidu, Y.S. Jagan Mohan Reddy, MK Stalin and KC Rao will rise to prominence and turn kingmakers. This is almost unlikely, but as anything is possible in politics and especially in a democracy, market needs one more day to clearly understand who India wants as Prime Minister and which party will form the government.