Following the NDA coalition’s victory, market sentiment swiftly shifted from apprehension to optimism, triggering a robust rebound. The Nifty 50 surged by 3.4% on June 5 and added another 1.2% on June 6, breaching the 22,900 mark. Despite initial concerns over BJP’s standalone majority, confidence in the NDA coalition’s stability revitalized the markets.
Sandeep Tandon, CEO of Quant Mutual Fund, emphasized India’s resilient macroeconomic fundamentals, foreseeing a continued focus on policy continuity, infrastructure, and capital expenditure.
Policy Continuity Assured
Echoing Tandon’s sentiment, analysts anticipate continuity in the government’s economic agenda, citing historical precedents. The market’s initial downturn on June 4, with the Nifty plummeting by 6%, was swiftly reversed as the NDA secured a comfortable majority with 292 seats.
Kotak Equities Research downplayed fears of policy shifts, projecting a steadfast commitment to investment-led growth and minimal deviation towards populist measures.
Opportunity Amid Volatility
Despite market turbulence, Tandon viewed the recent volatility as a buying opportunity, underscoring India’s enduring fundamentals. He encouraged investors to capitalize on attractive valuations, aligning with India’s long-term growth narrative.
Foreign investors, such as Arun Sai of Pictet Asset Management, shared Tandon’s optimism, citing India’s overlooked policy continuity and the coalition government’s commitment to economic stability.
Coalition Strength and Sectoral Outlook
The coalition’s diversity, including notable figures like Chandrababu Naidu, promises a balanced approach to governance, particularly in technology and development sectors.
Analysts at CLSA and Bernstein expressed confidence in Modi 3.0’s ambitious agenda, anticipating significant strides in infrastructure and defense sectors.
Sector rotation is anticipated, with capex-linked stocks poised for a rebound, while strategic portfolio realignment reflects investor anticipation of forthcoming policy reforms and sector-specific growth prospects.
Market participants eagerly await forthcoming policy announcements and the NDA’s 100-day agenda, which are poised to provide further clarity and bolster investor confidence.
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