Following the exit polls predicting a decisive win for Prime Narendra Modi and his Bharatiya Janata Party (BJP)-led alliance, Indian stocks and financial assets witnessed a significant surge, hitting intraday record highs. The optimism reflected in the financial markets comes from the confidence in Modi's government, which is poised for a rare third consecutive term in power, a feat indicated by local exit polls. According to projections from these polls, the BJP-led National Democratic Alliance might secure around 365 of the 543 available seats in the lower house of India's Parliament. This prediction sparked a wave of bullish sentiment among investors, resulting in the Nifty 50 index and the BSE Sensex both rising more than 3%, marking their best intraday gains since February 1, 2021.

The positive reaction from the markets is partly attributed to the anticipated continuation and expansion of infrastructure development under Modi's leadership. Companies within the Adani Group, for example, saw significant share price increases, with Adani Ports surging by more than 10% and Adani Enterprises climbing by 7%. Ambuja Cements, another beneficiary of the bullish market sentiment, saw its share price jump almost 6%, underlining the market's expectation for a boost in infrastructure and construction sectors.

Financial institutions also basked in the optimistic outlook, with shares of the State Bank of India climbing by almost 10%. Likewise, ICICI Bank and HDFC Bank experienced gains of more than 2%, reflecting the broader confidence in Modi's economic agenda and its implications for the banking sector.

The overall market sentiment is buoyed by the expectation of a continued focus on infrastructure build-out, encompassing housing, transportation, and digital infrastructure developments. According to Malcolm Dorson, a senior portfolio manager and head of emerging markets Strategy at Global X ETFs, the momentum in these sectors is expected to persist, contributing to sustained growth and investor interest in the Indian market.

As the country awaits the final election results, the initial response from the financial markets underscores a widespread belief in the stability and growth potential of Modi's economic policies. This sentiment, mirrored by the record highs in stock indices and the rally in key industry shares, highlights the economic optimism encapsulating the prospect of Modi's continued leadership and its anticipated impact on India's development trajectory.