 "Pre-Market: Expect bull charge on stock markets today")
"Markets are sentimental and will react positively because the BJP has won more seats than expected in Rajasthan and Madhya Pradesh. Markets would now look forward to a stable government at the Centre (after 2014 general elections)," said IIFL Chairman Nirmal Jain.
"Poll results will have positive implications for markets. Inflation has had its impact. Markets need a pro-growth government and low inflation. Good non-payroll data from the US has already had positive impact on equity markets globally, including in emerging markets. With these factors put together, it will augur well for Indian markets," said ICICI Prudential Asset Management CIO Sankaran Naren.
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Though some experts, such as Kotak Institutional Equities' Sanjeev Prasad and K R Choksey's Deven Choksey, believe the market had more or less priced in the election outcome, others are more positive and believe there could still be gains in the next few sessions.
RBS Private Banking CIO Rajesh Cheruvu adds: "The markets will take the results very positively. I think the impact will be seen on Monday itself, with the markets opening higher, with a gap. The rally is likely to continue, with the Nifty scaling new highs - possibly the 6,400-6,500 level - in the near term."
The possibility of a BJP-led government at the Centre has enthused markets, as Narendra Modi and the BJP-led NDA are seen as more reform-oriented and industry-friendly than the current Congress-led United Progressive Alliance.
"It reaffirms our view about silent transformation in the Indian politics - voters are giving decisive mandate to leaders pursuing agenda focused only on 'growth and governance'; and completely rejecting the 'dole-out' policies. Markets will be enthused, as this is very positive for the economy in the long run," said SBI Mutual Fund CIO Navneet Munot.
The international broking community has also been looking forward to a BJP-led central government after the Lok Sabha elections. They have especially been supportive of its prime ministerial candidate, Narendra Modi, who they believe is good for the Indian stock markets because of his business-friendly image. Ace stock-market strategist, CLSA' Christopher Wood, has predicted in his report 'Greed & Fear' a "dramatic rally" if Modi gets a visible majority.
"This is because business confidence will rise dramatically; and, with it, the chances of a new investment cycle. If BJP gets to 190-200 seats on its own, it will be in a strong position to form a viable coalition government," he said in his report.
Other investment banks like Goldman Sachs, UBS, Credit Suisse and Bank of America Merrill Lynch have also been vocal about a BJP win drastically improving the outlook for the Indian stock market.
Macquarie Securities' head of research, Rakesh Arora, says: "The state election results are 3.5:0 in favour of BJP, which has won close to an astonishing 68 per cent of the seats being contested on in these four states. Markets should get confidence from this performance and will extrapolate these results for the possible outcome for general elections due next year."
The benchmark indices, BSE's Sensex and NSE's Nifty could scale new highs, as euphoria around a BJP win has enthused markets. In the next few sessions, the NSE Nifty is expected to touch the level of 6,450-6,500, while the Sensex could touch 21,300-21,350, analysts say.
On Friday, the Sensex had crossed the 21,000 mark, but fallen a little to settle at 20,996, up 0.9 per cent over the previous week's closing of 20,792. The Nifty gained 1.3 per cent during the week to end at 6,259 after having touched a high of 6,300.
The Sensex touched its all-time high earlier this year. A day before the Muhurat trading session, it closed at 21,239 after touching an intra-day high of 21,321.53. Intra-day, the Nifty scaled to 6,342 before ending the day at its all-time closing-high of 6,317 (it, however, did it not breach its all-time intra-day high of 6,357 that day).
However, participants believe the impact of BJP's decisive victory in Madhya Pradesh, Rajasthan, and Chhattisgarh on the market could fizzle out after the first few trading sessions, as other events might catch attention. They are being watchful of levels beyond 6,500 and feel it is unsustainable. That's because, experts say, most foreign institutional investors had already been long on the market before the exit poll results anticipated a BJP win in four states. While some chose to sit on the sidelines and booked profits after the exit poll results, most are already heavily invested in the markets.
After the election euphoria has died down, the next big trigger for the market will be the US Federal Reserve's Federal Open Market Committee meeting on December 17 and 18. This would be followed by the Reserve Bank of India's policy review on December 18.
Markets would also keenly watch the trade and industrial production data, which are expected to be released later this week.