Mahindra Group’s Executive Chairman Anand Mahindra on Saturday lauded the Uttar Pradesh election results, which handed over a clean sweep of the state to BJP, underlining the comfort to the investors from the stability.
“Investors value predictability and stability,” Mahindra, one of the country’s top businessmen, wrote in a tweet posted after most of the results were in. Mahindra said that BJP’s resounding victory in UP points to long term leadership.
The largest state elections in India since the 2014, when BJP swept to power at the centre, have handed over the victory once again to the saffron party with wins and gains in 324 seats in an assembly of 403.
The resounding win, possibly beating all exit polls, will be a shot in the arm for the party and its flag-bearer Prime Minister Narendra Modi, who will get more confidence to push forward tougher reforms.
Mahindra said that the “markets may well applaud (it) next week.”
Analysts say a resounding win for BJP in Uttar Pradesh will likely give a booster to the stock markets, but it will only have a temporary impact. The benchmark indices will likely celebrate a clean sweep for BJP in the crucial state, which is much ahead of only a comfortable position close to the majority mark predicted by most exit polls, but are sure to return home after the party ends.
You may also like to watch:
Earlier Friday, the markets traded strong in the morning trade after the release of the exit poll results, but later consolidated gains to close only mildly positive, buying time to wait for the final judgement.
Similarly, analysts caution against letting the sentiments loose into the markets and buying heavily, as any rally based on election results would most likely be short-lived. Post any short-term movement, the markets would likely come back to the usual trajectory, and would continue to be guided by the fundamentals, such as progress of the economic reforms, analysts say.
“Any reaction either on the upside or on the downside based only on the elections is going to be very very short-lived,” Sunil Singhania, CIO – Equity Investments, Reliance Mutual Fund, said in a recent interview to CNBC TV18.