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Published: May 20, 2024
Updated: May 20, 2024

PM Modi Predicts Strong Market Surge Post-Election Results

Modi Assures Robust Market Performance:

Prime Minister Narendra Modi, in a televised interview aired on Sunday, forecasted a strong performance in the stock market following the announcement of election results. He expressed confidence that the market would experience significant activity and gains, particularly in the week following the results. "You see, the day election results come out, and throughout that week, those who punch trades will get tired," Modi remarked, addressing concerns about market nervousness in the lead-up to the election outcome.

Economic Reforms and Market Growth:

Modi highlighted the impressive growth of the Sensex under his administration, noting its rise from 25,000 to 75,000 points. He emphasized that increased participation from common people in the stock markets would benefit the economy, encouraging citizens to adopt a higher risk appetite. "The more common people invest in stock markets, the better for the economy. And the risk appetite of every citizen should rise," he stated. He also pointed out the recent rally in shares of public-sector undertakings.

Market Volatility Amid Elections:

Indian equities have experienced turbulence since the elections commenced on April 19, driven by concerns over whether the ruling National Democratic Alliance (NDA) would secure a sufficient majority to continue implementing substantial reforms. The India VIX, an indicator of market volatility, has surged by 47% since the elections began. Modi's remarks come after similar reassurances from three senior Cabinet ministers about market stability.

Ministerial Assurances:

Union Home Minister Amit Shah and External Affairs Minister S. Jaishankar had earlier addressed market volatility, suggesting that the turbulence was temporary and predicting a market rebound post-election results. Shah recommended that investors take advantage of the current market conditions, anticipating a significant rise after June 4. Jaishankar, while speaking at an NSE event, expressed confidence that market volatility would decrease as election results drew nearer. Finance Minister Nirmala Sitharaman also echoed these sentiments, emphasizing the market's preference for stability and predictability in taxation and policies.

Market Analysts' Perspectives:

Analysts view Modi's statements as a reflection of the ruling party's confidence in retaining power. U. R. Bhat, co-founder of Alphaniti Fintech, suggested that while political statements alone might not significantly influence market movements, they reinforce expectations of continuity in governance. Modi, addressing a rally earlier, highlighted the ten-year growth trajectory of the equity markets, underscoring the increased involvement of small investors and the growing trust of global investors in India's stock market.

Stability and Growth on the Horizon:

As India approaches the election results, market participants and analysts alike anticipate a period of strong performance, driven by the prospect of continued economic reforms and pro-entrepreneurship policies. The assurances from Modi and his senior ministers aim to bolster investor confidence, suggesting that the markets are poised for a significant upswing in the near future. Markets will remain closed on Monday due to the general elections, adding a brief pause before the anticipated surge.