In the Indian subcontinent, the election of Narendra Modi as the Prime Minister of India for the third time has created a great deal of excitement and speculation about the future of the country. With his second consecutive term, Modi has not only cemented his position as a leader but also gained a strong mandate from the people of India. This election victory has resulted in high expectations and speculations regarding the impact Modi’s third term will have on the Indian stock market.
Impact of Modi’s Third Term on Indian Stock Market
The Modi government’s economic policies during its previous terms have had a significant impact on the stock market. The market responded positively to the implementation of reforms such as the Insolvency and Bankruptcy Code (IBC), which aimed to streamline the process of corporate insolvency. Additionally, the initiatives such as the Make in India campaign and the Swachh Bharat Abhiyan (Clean India Mission) had a positive impact on the sentiment and investor confidence.
“You will see that within one week after June 4, the day election results are to be declared, market participants will get tired,” PM Modi said in an interview to NDTV while hinting that the market will hit fresh record highs.
With Modi Ji’s victory in this election, there are expectations that his government will continue to pursue similar economic policies during its third tenure. These include further liberalization of FDI policies, promotion of domestic manufacturing, and improvement of infrastructure. These measures are likely to boost investor sentiment and stimulate economic growth.
However, there are also some concerns and risks associated with a Modi-led government for the stock market. One concern is the possibility of rising inflation, given the large government spending and populist policies of the past. Additionally, any changes in foreign policy or international relations could have implications on the stock market as well.
A leader’s personality also determines the stock market’s price trend. When the leader is powerful and well-liked, he can attract more foreign investment, boosting the economy and good sentiment, and driving the stock market higher. A BJP victory could cause the market to respond differently from earlier optimistic patterns. NDA and BJP won more seats in 2019 than they did in 2014. Similary, the BJP is expected to do better during the 2024 election than 2019 results. The BJP’s vote jumped from 282 to 303, while the NDA’s rose from 336 to 353. And, in 2024, it is expected to cross the 400mark.
Bloomberg Hong Kong predicts that India Set to Get ‘Huge’ Foreign Inflows After Vote: National Stock Exchange. This is another indication of bullish market which is likely to stay bullish for a long period.
In addition, the BJP expanded its influence into eastern and southern India, especially in Tamil Nadu.
Let us pray for India and keep an eye on stock market movements on June 4th 2024.
