Banking stocks were the biggest gainers in trade today, following Sunday's exit poll data. State Bank of India was the driving the rally, gaining as much as 6 per cent, while other notable gainers from the Bank Nifty pack were ICICI Bank (5 per cent) and Yes Bank (4.2 per cent).

The rally in government owned banks was also phenomenal with PNB (up 5.1 per cent) and Bank of Baroda (up 6 per cent) leading the pack.

Almost all of the exit poll data, barring a couple have predicted a solid majority for the BJP led NDA. This has led to a robust rally in stocks, with Monday seeing gains of 930 points on the Sensex. Friday has also seen gains of 500 points on the Sensex, thus taking the 2-day gains in the benchmark index to almost 1,500 points.

The rupee has also rallied strongly to 69.33, a jump of almost 70 paise. Strong gains in the rupee might lead Foreign Portfolio Investors back into the Indian market.

Analysts are however asking investors to exercise some caution ahead of the final counting of votes on May 23. If the exit polls are not exactly able to gauge the trend, markets could in for a dissapointment.

GoodReturns.in