After exit polls predictions on Lok Sabha election, now brokerages have also commented on stock market’s performance if Modi led NDA government wins.
On 3rd June, after the predictions of the Modi led NDA government The Sensex surged by 1859.88 points, opening at a record 75,821.19. Similarly, the Nifty jumped 603.85 points, starting the day at 23,134.55.
Notably, all 50 companies in the Nifty index saw advances, with no declines, marking a rare and robust market performance.
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Stock Market On 4th June If Modi Wins
Brokerage firm JP Morgan has said that if the ruling Bharatiya Janata Party (BJP) wins in the Lok Sabha election 2024, then the Reserve Bank of India will start easing rates amidst a potentially benign US/global macro outcome.
The brokerage added that it overweight on financials (SBI, Bank of Baroda, ICICI Bank, LIC Housing Finance, Shriram Finance, HDFC AMC, ICICI Prudential, ICICI Lombard). From the auto sector, it has recommended Bajaj Auto, Mahindra & Mahindra, Ashok Leyland, Exide and Samvardhana Motherson.
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JP Morgan said that it is overweight on Godrej Properties and Prestige. It recommended Mankind, Abbott India, Sun Pharma, Max Healthcare and Rainbow Hospitals. The brokerage said that industrials stocks will do good but underweighted on IT and materials.
CLSA has said that the market has largely priced-in a third Modi term. It expects the Modi government to focus on macro financial stability, battling rural stress and giving a push to the medium-term plan of building global manufacturing hubs.
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Brokerage Expect On Stock Market If NDA Wins
Nomura India said, “We expect the equity market to react positively in the near term in case the exit poll results translate into actual results on 4 Jun 2024. The market movements in the past elections suggest that the market tends to do well going into the election and after the election the returns tend to be relatively lower. We note that unlike in the past elections, the outperformance of Indian equity markets to other benchmark indices such as the S&P and MSCI EM is lower this time.”
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Kotak Institutional Equities said “Many narrative and PSU stocks are trading at outlandish multiples and are factoring in optimistic volume and profitability assumptions. A large BJP victory may sustain rich-to-bubble multiples in parts of the market (automobiles, capital goods, PSUs) for longer, but we would be surprised if many of the lofty embedded expectations come to fruition.”
