Indian equities and the rupee are expected to see gains at market open on Monday, following exit polls indicating Prime Minister Narendra Modi’s probable return for a third term.
Exit poll summaries suggest the National Democratic Alliance (NDA) may secure between 355 and 380 seats in the 543-member Lok Sabha.
Additionally, the Bharatiya Janata Party (BJP) achieved a sweeping victory in the Arunachal Pradesh Assembly elections, securing 46 out of 60 seats on Sunday.
On the economic front, positive news comes as government data revealed India's GDP growth exceeded expectations, reaching 7.8 percent in the fourth quarter of FY24.
Investor sentiment may also be buoyed by positive global cues and the return of foreign institutional investors as net buyers in Indian equities on Friday, following two consecutive days of sell-off.
The Reserve Bank of India’s Monetary Policy Committee will commence its three-day meeting on Wednesday, with most economists predicting no change in key interest rates.
In Asian markets, a general uptick was observed this morning after a private survey indicated stronger-than-expected growth in China’s manufacturing sector for May.
Gold prices edged higher due to a weaker dollar, while oil prices rose as OPEC+ extended production cuts into 2025, with plans to restore some production as early as October.
In the United States, stocks closed mostly higher on Friday. Treasury yields eased after the Federal Reserve's preferred inflation measure aligned with estimates, posting the smallest increase this year at 2.7 percent in April, fueling hopes for a potential interest rate cut by year-end.
Wage growth moderated, consumer spending growth weakened more than anticipated, and income growth slowed last month, alleviating some investor concerns about inflation and interest rates.
The Dow Jones Industrial Average surged 1.5 percent, the S&P 500 gained 0.8 percent, while the tech-heavy Nasdaq Composite finished slightly lower.
European stocks closed higher on Friday despite indications of accelerating inflation in the euro area.
The pan-European STOXX 600 increased by 0.3 percent, Germany’s DAX finished marginally higher, France’s CAC 40 rose by 0.2 percent, and the UK’s FTSE 100 advanced by 0.5 percent.