Indian benchmark indices may open 1-2 per cent higher, post exit poll results. However, gains are likely to be capped as investors would like to wait for the actual outcome.

The SGX Nifty was up 262 points, suggesting a near 800 points jump on the Sensex.

If the BJP is likely to get a majority on its own, this could boost the markets even further. However, fundamentals would come back to the fore in the next one week or so.

At the moment the valuations of the market are already rich at 20 times 1 year forward p/e for the Nifty and hence caution could be exercised by the voters.

Almost all of the exit polls have given a majority to the NDA, though investors would like to see a complete majority for the BJP.

In the next few days the markets is likely to cross its previous peak of 39,400 points on the Sensex, if the BJP does get a majority. One would have to look at the high beta space for action in today's trade.

The likes of banking, real estate and metal stocks are likely to see good action. However, investors must remain cautious and book profits at higher levels as global cues continue to remain worrisome. Trade worries between China and the US and a sharp depreciation in the currency are factors that markets should watch for.

GoodReturns.in