Domestic equity benchmarks Nifty 50 and Sensex settled flat in the previous session, but logged their best week since early February, driven by gains in financials and metal stocks. Nifty 50 surpassed the 23,000 mark for the first time ever on Friday and the indices recorded their biggest two-week gain in the last five months as the election fever has gripped the pulse on D-Street.
The frontline indices gained 2.2 per cent and 2.02 per cent on the week amid the broader bull run picked up ahead of the Lok Sabha election results on June 4. The weekly rise in the domestic benchmarks was fuelled by foreign investors dialling back bearish bets on domestic equities as well as the Reserve Bank of India’s record dividend to the government.
Will the bull run sustain post-June 4? Here’s what experts say
Sunil Damania is the Chief Investment Officer at 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.
THIS COPY IS BEING UPDATED
Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.
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Published: 25 May 2024, 09:17 PM IST