Exit Polls: This CHART explains what Modi-win would mean for Indian Rupee
Indian rupee kicked off today's session, by opening at 69.80 per dollar.
The benchmark indices like Sensex and Nifty 50 were trading on a cautious note on Tuesday after a massive blockbuster performance in previous trading session where the 31-scrip index surged by 1,471 points and the 50-scrip by 350 points. However, there was no stopping the strengthening of Indian rupee against US dollar benchmark at interbank forex market. At around 1248 hours, the rupee is trading at 69.706 levels up by 0.160 points or 0.23% against the dollar. The domestic currency kicked off today’s session, by opening at 69.80 per dollar.
This upbeat sentiment was led by foreign investors turning net buyers of rupee, as exit polls of various agencies have indicated another NDA government win. Interestingly, predictions have started to take place in regards to rupee too. Here’s a chart which can help you understand what Modi retaining power in Lok Sabha election 2019 would mean for rupee.
There are three scenarios, identified by HDFC Bank.
1. Modi led NDA government wins majority - If there is a win with big margin, then markets will cheer results with Indian rupee appreciating. USD/INR could move up to 68 levels.
2. BJP wins, but with the help of non-NDA regional parties - This could hit equity valuations and impact sentiments to some degree. Expect USD/INR to move around 72-mark.
3. UPA government wins with help of regional parties - There could be change in the policy directive. Hence, expect USD/INR to move around 74 levels.
HDFC Bank says, “The appreciation bias that we have penciled in for 2H-FY20 will have to be reviewed and altered if the tariffs and trade risks persist.”
On Tuesday's trading session, Sameer Kalra, Equity Research Analyst & Founder Target Investing said, "US market Future Indices and Asia Indices are mixed with positive Huawei ban and gives grace period of 90 days. The oil prices are at $72.17/bbl(0.28%) as Russia is inclined to relax OPEC+ cuts. USDINR at 69.74(-0.15%) as EXIT POLLS show comfortable majority government to return which helps maintain the policy decision."
"We expect markets to be Neutral to Positive as EXIT POLLS show comfortable win for current government with FIIs turning buyers," adds Kalra.
(Image source: HDFC Bank)
Here’s what Exit Polls say about this Lok Sabha elections result:
Times Now - MVR: The poll here suggest NDA win with 306 seats, followed by UPA government having 132 seats, Mahagathbandhan (MGB) government with 20 seats and remaining 84 seats among others.
Today’s Chanakya: Interestingly, the prediction reveals a huge win for NDA government with 350 seats, followed by UPA with 95 seats and 97 among others.
Axis My India - India Today: The poll intimates NDA win with 353 seats, UPA with 94 seats, MGB with 13 seats and others including 82 seats.
C-VOTER: Exit polls estimate 287 seats in the hands of NDA government, UPA with 128 seats, MGB with 40 seats and 87 seats divided among others.
Result of Lok Sabha elections would be announced on May 23.