The Indian share market hit new benchmarks on Thursday as the Sensex and the Nifty 50 hit their fresh record high levels. The Nifty50 jumped 1.8 per cent to hit its fresh record high of 22,993.60, while the Sensex jumped 1.7 per cent to hit its fresh record high of 75,499.91 during the session. What’s more? The market witnessed buying in mid and small caps as well while as many as 222 stocks including Mahindra and Mahindra, Ashok Leyland, Eicher Motors, and Tata Steel hit their fresh 52-week highs in intraday trade on BSE.
In layman’s terms, the market behaved assuredly and relaxed even though there are two phases of Lok Sabha elections 2024 pending. This market behaviour apart from technical factors is predominately credited to the market’s confidence of a Modi 3.0 with a bigger and better mandate than in 2019 when it swept back to power with a massive 303 seats in spite of the ongoing Rafale controversy at that time.
This market behaviour was seen as PM Modi exuded confidence about the stock market’s performance and outlined his vision for India’s development. Prime Minister Narendra Modi said the Bharatiya Janata Party has already won a majority of the seats contested in the parliamentary elections due to end next week, with the votes in the remaining two phases as a bonus.
Earlier, after the fourth phase, while addressing a rally in West Bengal’s Bongaon, Union Home Minister Amit Shah had said, “4 phases of polling have been completed. Elections for 380 seats have been completed. Elections for 18 seats in Bengal have been completed. Today I tell you, that out of 380, PM Modi has achieved absolute majority by winning 270 seats. The fight ahead is to cross 400.”
This confidence from the top two of the government seems to have injected a much-needed sense of assurance of stability in the market that made it skyrocket on Thursday, a behaviour generally seen only after the exit polls start coming. Just days before this jump, PM Modi in an interview reminded how under his rule markets have gone from 25,000 to 75,000. He also urged citizen to have the “risk-taking capacity” that was followed by Thursday’s mega performance at the share market.
While factors like the windfall RBI infusion of funds also contributed to how the Indian share market went into a gravity-defying mode on Thursday, analysts at foreign brokerage Bernstein, also see a higher probability of the BJP government winning around 330-350 seats, thus, driving some rally in the markets post-election results. They expect the Nifty50 index to scale past the 23,000 mark.
Already bullish on a bigger and better Modi 3.0 mandate, Bernstein said, “We expect a short-term rally either leading into elections or the week after results potentially breach our 23K Nifty target and then a profit booking as the reality of execution and valuations emerge. In our view, sectors that will lead are Infra, manufacturing, domestic cyclical, a bit of financials, and state-owned enterprises (PSUs) in general.”
PM Modi gave the clarion call of ‘Ab ki bar 400 par’ for the NDA while setting a target of 370 seats for the BJP. While the Congress shrugged it off, if Bernstein’s prediction is anything to go by, the BJP is going to be very close to the target set by the Prime Minister.
Even on Tuesday, PM reiterated his ‘400 par’ target in an election rally in Madhya Pradesh’s Dhar where he reasoned, “Modi wants 400 seats so that Congress won’t bring back Article 370 to spoil the game”
While the markets rallied behind this Modi sentiment on Thursday, political strategist Prashant Kishor, who earlier claimed BJP will fare better than its 2019 mandate, said, “Those who are rattled with my assessment of outcome of this election must keep plenty of water handy on June 4th.” Now, all sides seem to be indicating at one direction — a bumper Rahul $
Modi
gandhi 3.0.
(With inputs from agencies)
