'Ground shock': What BJP seat wins above 290 or below 240 could mean for stock market

'ground shock': what bjp seat wins above 290 or below 240 could mean for stock market

'Ground shock': What BJP seat wins above 290 or below 240 could mean for stock market

How many seats the incumbent BJP or the NDA alliance wins in the ongoing Lok Sabha elections could influence the stock market in days to come. In Bernstein words, BJP winning over 290 seats would boost 'Mission: India 2047'; the incumbent winning 260-290 seats would rein in capex drive; a 240-260 seat wins for BJP would be a 'ground shock' while less than 240 seat wins (with NDA less than 270 seats) would trigger the return of populism. (Table below)

Bernstein said The India growth story, which has been expanding from strength to strength, would not fizzle out. It took some steps forward in the “India Shining” phase till 2004 and made great strides in the “Bharat Buland” (Lofty India) period till 2009, even as it faltered somewhat in scandals and stagflation during the taper tantrum, Bernstein said.

From 2014, it noted, India started taking a giant leap with large-scale reforms that came at a rapid pace, partly also being helped by the ruling party getting a majority unforeseen for three decades.

"This reason, coupled with the performance on fiscal parameters, keeping inflation under check, a better track record on capex and a sustained manufacturing push, is why the markets will react positively to continuity of power and can trigger a short-term correction in case the results for ruling party are significantly down from expectations.

In case, the PM Modi-led BJP wins 260-290 seats, there could be mild profit booking in the stock market in near term. High single-digit market returns for this year likely, Bernstein said. If BJP wins 240-260 seats, there would be moderate to heavy profit booking near term. High single digit market returns for this year are still likely, it said. Meanwhile, if BJP wins less than 240 seats, there would be a return of populism and heavy profit booking near term. In such a scenario, low or negligible returns for markets this year is likely, Bernstein said.

'ground shock': what bjp seat wins above 290 or below 240 could mean for stock market

Bernstein sees a higher probability of around 330-350 seats for NDA, which is more of a scenario between case1 and case 2  driving some rally in the markets post-election results (or heading into it). It sees a short-term breach of 23,000 on Nifty, but sees a swift profit booking brings it back below that level.

Bernstein said the 100-day agenda of the government and expectations from the Budget are other events that could play out as support catalysts. It thus expects some near-term buoyancy in the equity markets.

"While the risks emerge on case 3/4 playing out - we see it as a low probability outcome. Continuity of power was known to equity markets, which is why we had a rally in Nov/Dec last year - playing again and again on the same theme leads to absurd outcomes for valuations - hence, we believe the focus will eventually return to macro, earnings growth, reasonability of valuations etc," Bernstein said.The over analysis-based self-induced stress the markets have seen over the past month is the only reason for the relief rally Bernstein is calling for.

Bernstein said this year's returns would likely stay at high single digits, with a possibility to remain low only in case of a frantic policy shift that can come with a change in government.

"For the broader macro, the reforms undertaken mean that India has outgrown the phase where it will likely depend on political continuity to deliver high growth, as the multi-year cycle that has begun is unlikely to be impacted significantly due to minor policy changes. The shifting focus, however, can impact the long term growth/views on sectors and external front - like exports and balance of payments," it said.

Watch Live TV in English

Watch Live TV in Hindi

OTHER NEWS

2 hrs ago

Diljit Dosanjh Says He Once Ran Away From Home When He Was 7: 'School Mein Ek Ladki Thi...'

2 hrs ago

Randeep Hooda recalls not sleeping at all for 2 years while shooting for Veer Savarkar: ‘When one is hungry…’

2 hrs ago

Malavika’s Mumbaistan: MUMBAI CALLING

2 hrs ago

Eliminating England from T20 World Cup was a throwaway line: Mitchell Starc

2 hrs ago

Gautam Gambhir Makes One Demand Before Accepting Role Of India Head Coach

2 hrs ago

Asian Paints Q1 quarterly results FY 2024-25 date and time Announced! BIG update on upcoming earnings details

2 hrs ago

At marathon 6-hour meeting, Amit Shah pushes for area domination plan in Jammu

2 hrs ago

Sikandar Kher excited to do a comedy film

2 hrs ago

Jyotika On Bollywood Comeback And Being A Working Mother: Everything Is Possible For A Woman | EXCLUSIVE

2 hrs ago

‘Why should we teach about riots in schools?': NCERT chief on tweaks in textbooks

2 hrs ago

Heat stress may reduce from June 19; monsoon remains weak and slow

2 hrs ago

RBI, SEBI-regulated firms asked to switch to ‘160’ number series

2 hrs ago

Rupee depreciation against dollar miniscule as compared to other currencies: BoB

2 hrs ago

Babar Azam is given enough chances to improve as Pakistan captain, but…: Shahid Afridi

3 hrs ago

Sheeraz best Indian on show as Skeet competitions begin in Lonato

3 hrs ago

IAF Contingent Takes Part In Combat Exercise 'Red Flag' In Alaska

3 hrs ago

Brighton make Fabian Hurzeler, 31, youngest Premier League manager

3 hrs ago

Eknath Shinde's party refutes EVM tampering charge: 'If machine was hacked...'

3 hrs ago

'BJP Will Break TDP, JD(U), LJP If...': Sanjay Raut's Claim Over Lok Sabha Speaker Post

3 hrs ago

Watch: Aamir Khan's new emotional video from daughter Ira's wedding

3 hrs ago

From reel to real: Meet Bollywood's doting dads

3 hrs ago

‘This will be last IMF bailout’: Pakistan PM Sharif vows to bring nation’s economy back on track

3 hrs ago

CLSA on Indian banking sector's fundamentals

3 hrs ago

Jonny Bairstow-Harry Brook played beautifully: David Weise after Namibia's loss vs England

3 hrs ago

DPDP Rules to Electronics & Chip Making: Ashwini Vaishnaw Highlights Top Priorities of New Government

3 hrs ago

Day after calling Indira Gandhi ‘Mother of India’, Union minister Suresh Gopi issues clarification

3 hrs ago

Why do train drivers violate speed restrictions? Railway Board finds out

3 hrs ago

NEET UG result row: Education minister flags 'irregularities', says 'lot of improvement required in NTA'

3 hrs ago

Oilers rout the Panthers 8-1 in Game 4 to avoid being swept in the Stanley Cup Final

4 hrs ago

Nine IPOs coming next week, 24 in total over next few months

4 hrs ago

Sachin Pilot Slams BJP's '400 Paar' Target At Oxford University In UK

4 hrs ago

Did RSS chief critique PM Modi? First Things Fast

4 hrs ago

Amid declining volatility and lack of fresh triggers: here is what the market experts suggests for stock markets, FIIs, Crude and Gold?

4 hrs ago

How ‘Melodi’ is the flavour of G7, but apart from that there’s anxiety and uncertainty

4 hrs ago

NEET UG 2024 Controversy: AISA Announces Nationwide Student Strike On June 19-20

4 hrs ago

Asaduddin Owaisi calls UAPA 'ruthless' amid Arundhati Roy case: 'If Modi 3.0 was expected to learn from election...'

4 hrs ago

10 Signs You’re Dating An Exceptional Man

4 hrs ago

Suresh Gopi clarifies 'mother of India' reference

4 hrs ago

'Learning the Art of Discipline from Rohit Sharma': Shubman Gill's Latest Social Media Post Goes Viral

4 hrs ago

Decisions not taken by me: Om Birla on LS Speaker