The Bharatiya Janata Party (BJP) was seen leading in several seats in Karnataka, leading in over 100 seats out of the 222 seats that went to polls last week.
Experts largely believe that the just short of majority mark so far is good for the market. While some believed it could ensure a strong foundation for 2019, others said that the Street could get back to focusing on earnings and other macros.
Market veteran Porinju Veliyath sees this as a big boost for the market and sees this as an opportunity for small and midcaps to see a bounceback.
A BJP-led government in Karnataka would prove a major boost for Modi ahead of the 2019 elections, silencing critics who said his popularity had faded over the rocky adoption of a nationwide sales tax and a sudden ban on high-value notes late in 2016.
Here is a look at what other experts are saying about the trends.
Amar Ambani, Partner & Head of Research, IIFL Investment Managers:
"This will go extremely well with the stock market, as it will anticipate the BJP forming the government on its own, possibly with the help of independent candidates - importantly, BJP's huge tally will mean, it will hold all key ministries, which would have been shared, in case a strong partner was to ally with them. This ensures tighter control on the state. The verdict will be seen as a big sentimental positive for the indices, which were factoring in a severely fractured mandate."
VK Sharma, Head Private Client Group & Capital Market Strategy at HDFC Securities:
"Going by the trends and the leads so far, with BJP emerging as the single largest party, markets are relieved. Even if the Congress forms the government with the help of the JDS, the markets won’t be perturbed. The markets will now start looking at the international commodity prices and the movement of the Dow. Early monsoon arrival forecast augurs well for the markets."
VK Vijayakumar, Chief Investment Strategist at Geojit.
"If BJP succeeds in gaining simple majority that will be a major morale boost for the ruling party and very positive for the markets. It is clear from early trends that BJP is making good gains at the expense of Congress. If this trend continues the markets will gain further strength. But the upside will be capped because there are some major headwinds in the form of high crude prices.
The middle east situation has turned very volatile following the killing of 55 Palestinian yesterday. The crude is likely to remain high or even go up. This will impact India's CAD which might touch 2.4% of India's GDP. Inflation will inch up and the RBI is likely to turn hawkish for June's monetary policy. These headwinds will cap the upside to the markets. The reaction to the election result will be short-term and the economic trends will dictate the direction of the market going forward."