NDA at 260 in Exit Polls to Fire Up Markets: BNP Paribas

BNP Paribas Securities says that if the exit polls on Monday evening indicate around 260 seats for the Narendra Modi-led Bharatiya Janata Party's (BJP) national alliance, the markets may see a further spike. Stock markets rallied to record highs for a second consecutive session on Monday, with the BSE Sensex topping 23,500 and the broader Nifty hitting a record high of 7,000. (Read more on markets hitting highs)

"Suppose the exit poll results talk about 260-270 for the NDA (National Democratic Alliance) or even higher then I think you would get a fairly positive reaction from the market," Manishi Raychaudhri, strategist and head of research at BNP Paribas Securities told NDTV. (Watch: Video)

However, he struck a note of caution saying historically exit polls have not always been accurate, so investors should be careful.

Opinion polls indicate the Bharatiya Janata Party (BJP) to emerge as the single largest party in the ongoing general elections. The BJP and its allies need 272 seats to form the next government.

Monday is the last day of polling in the last phase of the five-week-long elections.

In the event of a favourable outcome as is being largely expected on the result day of May 16, BNP Paribas says the markets may see a further 5-7 per cent upsurge and touch 24,000 or higher.

"I think from here to be significantly surprised by the results one would need a really strong and stable formation with possibly with the NDA getting a majority on their own, if that happens you could see still some more upside in this market another 5-7 per cent, possibly Sensex touching 24,000 or more. But I think anything below that is possibly already factored in into the current valuations," Mr Raychaudhri said.