Will the election season bring a bull run for the stock market
The Nifty 50 and the Sensex showed strong momentum last week with the exit polls setting the mood for the stock market. And with Sunday’s results promising stability ahead, the playground could be set for a bull run.
The Nifty 50 on Friday ended at 20267.90 points, showing more than 2 per cent weekly gains. Similarly, the Sensex too, showed more than 2 per cent gains, ending the week at 67481.19 points.
Does this mean that the stock market already has an idea where the Indian economy is heading towards in 2024?
According to Business Today Managing Editor Siddharth Zarabi, it can be deduced that India’s economy is on very strong footing with the latest Gross Domestic Product (GDP) growth standing at a “spectacular” 7.6 per cent.
“For an incumbent government, there could not be better tailwinds heading into a re-election fight,” Zarabi said.
Talking about the GDP growth for Q2, PM Modi took to X and praised the Indian economy for displaying resilience and strength.
The GDP numbers came as a pleasant surprise as they were better-than-expected.
The Bharatiya Janata Party (BJP) on Sunday swept three heartland states of Chhattisgarh, Madhya Pradesh and Rajasthan in a dominant electoral show. The Congress, on the other hand, drew consolation from a big win in Telangana.
WHAT ABOUT INFLATION AND JOBS?
The price situation is broadly in control, barring seasonal fluctuations. The Reserve Bank of India (RBI) is ahead of the curve when it comes to taming price rise.
With regard to employment, the global slowdown is having a big impact on the IT sector — one of the largest employers. Government jobs are putting forth additional efforts to pick up the pace.
The stock market must have factored in the BJP’s performance.
“Rajasthan a positive surprise, and so is Chhattisgarh as it too is going to the BJP. Overall, the results, especially Madhya Pradesh, seem to be already priced in trading sessions in the past week,” said Siddharth Zarabi.
Zarabi also spoke about continuing freebies in BJP-run Madhya Pradesh. The implementation of multiple policies in states will also show a green trend in the stock market.
“In run-up to this semi-final, BJP countered fire with fire, LadliBehna by LadliBehna. The big one, Pradhan Mantri Garib Kalyan Anna Yojana for 814 million Indians has already been extended to 2029,” said Zarabi.
The results of the assembly elections in Chhattisgarh, Madhya Pradesh, Rajasthan, and Telangana will have a bearing on the market when trade resumes on Monday.
Siddharth Zarabi further said, “Other issues matter too in a general election, in a country as widespread and diverse as India. But the simple truth-there is NO ONE, who is as big as an electoral colossus as @PMOIndia @narendramodi is across #Bharat.”
“As the #BJP says, #ModiHaiTohMumkinHai #Modi4PM2024,” he added.
With inputs from Siddharth Zarabi
