According to the poll-of-polls, the National Democratic Alliance (NDA) is projected to secure over 350 seats out of the 542 contested, spanning seven phases over 48 days.
While exit polls are estimates, the counting of votes will take place on June 4, Tuesday.
Here’s what experts said:
CLSA
Even as the exit polls give BJP a poll position, the final outcome is yet to come. Hong Kong brokerage CLSA said that a favourable outcome would raise investor confidence in India’s economic growth. This could encourage investors to play this growth beyond Modi stocks, which are direct policy plays.It has gone ahead to identify 54 stocks in the 183 stocks strong F&O basket arguing that these will be part of the India growth story. These stocks have been perceived as direct beneficiaries of PM Modi’s policies and half of these are PSUs. CLSA’s analysis reveals 90% of Modi stocks have beaten the Nifty in the election-focused rally over the past six months versus only 42% of the other companies outperforming. L&T, NTPC, NHPC, PFC, ONGC, IGL, MAHGL, Bharti Airtel, Indus Towers and Reliance are the preferred Modi stocks for CLSA analysts.Nomura
While it is apparent now that BJP/NDA has indeed secured a simple majority, this should calm investors’ nerves. Nomura in a note said that this scenario would largely ensure policy continuity, enable a sustained focus on capex while consolidating fiscal finances, support macro financial stability and a focus on inclusive growth. Given its higher seat share in the lower house, and rising seats in the upper house, the government may focus on the more politically contentious reforms around the factors of production including land, labour and capital.
Indeed, early reports point to digitalisation of land records, and a streamlining of labour codes in the 100-day agenda. “We would add that, while the market’s reaction will be different in a BJP-majority versus an NDA majority scenario, the overall direction of economic policy would still be largely similar, in our view,” Nomura said.
JM Financial
Policy continuity will ensure opportunities in defence and capital goods sectors while valuation comfort is available in private banks and consumer space. Unlike in the past, we expect large caps to outperform SMIDs (small & medium stocks) in this post-election cycle.
Emkay Global Financial Services
Seshadri Sen, Head of Research & Strategist, Emkay Global Financial Services had recently told ETNow that the current economic policy, the continuity of the current economic policy would be maintained if the BJP wins a majority on its own or comes even close to that.
He is also of the view that the Modi government’s war on inflation will continue and he does not think we will see runaway inflation in India if the BJP is re-elected.
Infact, they (BJP/NDA) were the ones who codified the inflation targeting regime of the RBI and after a long time, the government and the RBI have been in sync in terms of how to adapt monetary policy to deal with high inflation.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
