The celebrations are likely to return on the equity markets on Monday with the exit polls projecting a comfortable victory for the BJP-led NDA.

Analysts are expecting a gap-up start with the participants eyeing sectors that could benefit under the new regime.

Encouraging macro numbers released Friday would be another booster shot, while short-covering from foreign portfolio investors (FPIs), which have taken a bearish bet, is also not ruled out.

The past few weeks have witnessed investors battling nerves as fears grew the ruling coalition would fall short of the 400+ mark, that could lead to major economic reforms.

Last week, the benchmark Sensex plummeted 1449 points or 1.92 per cent, while the NSE Nifty tanked 426.4 points or 1.85 per cent.

The 30-share gauge had touched an all-time high of 76009.68 on May 27, while the broader Nifty also hit a record of 23110.80 on the same day.

``The exit polls results which indicate clear victory for the NDA with around 360 seats completely removes the so called election jitters which have been weighing on the markets in May. This comes as a shot in the arm for the bulls who will trigger a big rally in the market on Monday,’’ V.K. Vijayakumar, chief investment strategist, Geojit Financial Services, said.

``Large caps in financials, capital goods, automobiles and telecom are likely to lead the rally. The bulls will be further emboldened by the better-than-expected 8.2 per cent growth in GDP numbers which came after market hours on Friday,’’ he said.

An analyst from a domestic brokerage, who did not wish to be named, advised that retail investors should tread cautiously since the exit polls have been off the mark in the past.

He added that there could be volatility in the markets on Tuesday as the results trickle in. ``It’s better to invest after you get a clear picture of the next government rather than jumping the gun,’’ he noted.

Even if the NDA returns to power with around 350-360 seats it could still push through some reforms, market veterans said.

They however, fear a correction if the numbers fall below the 300 mark.

“If the NDA does not get 400-plus seats, some fundamental reforms requiring constitutional amendments may be challenging to implement, but there is still a lot that can be done with this kind of majority. Sectorally, infrastructure, BFSI, capital goods, telecom could be the key beneficiaries,’’ Dhiraj Relli, MD & CEO, HDFC Securities, said.

Investors will also track the decision of the monetary policy committee (MPC) meeting on June 7. The focus would also shift to government formation, the new cabinet and the Union budget which could be tabled in July.

“The market is approaching the event (results) with caution, and the positive surprise from exit polls can lead to a rally as majority of the exit polls are giving 350+ seats to the NDA. Conversely, a negative surprise from actual results might trigger a knee-jerk reaction in the market,” Santosh Meena, head of research, Swastika Investmart Ltd, said.

A rally in the stock markets may also spill over to the forex and bond markets. On Friday, the domestic unit had closed at 83.46 to the dollar against the previous close of 83.32, while the yield on the 10-year benchmark bond had settled at 6.98 per cent.