Quote On Post Election Impact on the Indian Markets by Sunil Damania, Chief Investment Officer, MojoPMS
Below the Quote On Post Election Impact on the Indian Markets by Sunil Damania, Chief Investment Officer, MojoPMS
Voter turnout and its impact on the election outcome is making the market nervous. The market is going with the equation that lower turnout means the BJP may get a lower number of seats as compared to the 2019 election. Our study shows that when BJP replaced the Congress in 2014, voter turnout increased by more than 800 bps. Remember, after 1984 first time a single party got majority seats in the parliament, unlike in the past, coalition government was the order of the day. We sense that the BJP should get a majority in the parliament without going into the merit of argument about whether lower turnout is better for the incumbent government. If the market falls before the general election outcome, one can expect a rally post-result. But if there is no meaningful correction, the market may behave like in 2019, where Indices moved down post-election result. Indian market valuations are rich, and that may keep the upside capped. Post-election, the market will start speculating on the budget announcement. This will also keep marketmen busy. Hence, we sense that in the next couple of months market will likely remain volatile.
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