D-Street looks set for Modi rally tomorrow

"Most exit polls are indicating a win for the NDA, which should trigger short covering on Monday," said Sriram Velayudhan, senior vice president, . Uncertainty had set in over the past few weeks and foreign portfolio investor (FPI) short positions in index futures were at record highs, he said.

FPIs' record bearish derivative bets and selling of shares have weighed down the market. In the past week, the and the fell close to 2% each. Though the fall in the market gauges in the past month has been less than a percentage point, traders and investors have been unnerved by the volatility with the indices swinging between gains and losses.

"We expect a gap-up opening on the market on Monday and can see a 1-2% up-move, even though volatility may persist," said Sunny Agrawal, head of research, .

"The numbers being better than expected will also give a positive boost to the market," said Agrawal. The Centre on Friday said the gross domestic product (GDP) grew 8.2% in FY24, surpassing forecasts.

After the last phase of the election ended on Saturday, exit polls showed the NDA winning with a comfortable majority. Votes will be counted on June 4. Though some exit polls have been inaccurate in the past, investors will take comfort from the fact that most are forecasting a strong show by the Bharatiya Janata Party (BJP).

"We may see a short covering rally on Monday if the exit polls maintain their views that NDA might get 350+ and BJP crosses 300," said Gautam Duggad, head of research, .

The unease in the market is reflected in the recent spike in the Volatility Index (VIX)-the market's fear gauge-which rose to a two-year high of 24.6 on Friday. In the past month, the VIX has gained 83%, indicating traders saw risks to the markets in the near term. Market participants expect the VIX to drop only on Tuesday after the vote count.