Indian stock indices opened higher on Friday, June 1, following five consecutive trading sessions of losses. The gains were primarily driven by fresh buying from investors after the recent dip.
Analysts believe that investors are likely to adopt a cautious approach ahead of the Lok Sabha election results scheduled for June 4. At the time of this report, the Sensex was trading 0.7% higher at 74,389.35, and the Nifty was up 0.7% at 22,641.85.
US stocks closed lower on Thursday, June 30, with the Nasdaq falling more than 1%.
After a rally over the past few weeks, markets faced resistance this week as risk aversion persisted until Thursday. Indian benchmark indices witnessed selling pressure ahead of the final phase of the Lok Sabha elections. The recent decline was partly due to investors booking profits at higher levels to avoid any potential risks in the market concerning the election results.
Excluding this week, Indian stock indices had been rallying, reaching new lifetime highs, tracking strong global market cues and hopes of Prime Minister Narendra Modi’s return to power. In the past two weeks, the Sensex had gained over 3,600 points on a cumulative basis.
Any upward movement is now expected to depend on cues from the exit poll estimates and Q4 India GDP data.
“The market is poised for the possibility of a sharp move based on the exit poll results tomorrow evening,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
“If the exit polls indicate a trend unfavorable from the market perspective, the crash can be sharp and swift.”
“We suggest aligning trades accordingly and adopting a hedged approach,” said Ajit Mishra, SVP, Research at Religare Broking Ltd.
(With ANI input)