CLSA’s Chris Wood sees Modi returning to power; ‘double-overweight’ on Indian shares

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Updated: March 22, 2019 3:50:44 PM

Ahead of the general elections, even as we continue to see a strong rally in Sensex and Nifty, CLSA’s Chris Wood is confident that the ruling party led by Narendra Modi will return to power, especially after the recent Balakot strike in Pakistan.

Why Modinomics won't draw votes for BJPTaking stock of BJPs prospects, Wood noted that Modi’s structural reforms, such as demonetisation and GST, have caused economic pain in the first instance.

Ahead of the general elections, even as we continue to see a strong rally in Sensex and Nifty, CLSA’s Chris Wood is confident that the ruling party led by Narendra Modi will return to power, especially after the recent Balakot strike in Pakistan. In his recent Greed & Fear report, Chris Wood noted that the forthcoming general election will be held in the absence of clear cut evidence of an economic upturn. “GREED & fear has always thought BJP would win the forthcoming general election. But there is no doubt that concerns had been growing in recent months,” he wrote.  Greed and fear continue to keep India at double overweight, says Christopher Wood.

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Taking stock of BJPs prospects, Wood noted that Modi’s structural reforms, such as demonetisation and GST, have caused economic pain in the first instance. “This is why the recent military skirmish with Pakistan could well prove the equivalent for Modi of what the Falklands War was for the late and great Margaret Thatcher in 1982,” Chief Equity Strategist at CLSA said.

Ahead of the general election, Wood sees room for foreigners to increase weight in India. After the airstrike in Pakistan on February 26, foreign investors have pumped in a net amonut of $3.3 billion in India since an opinion poll was released on March 4, showing a big increase in support for the Bharatiya Janata Party (BJP) following the airstrikes on February 26 in Balakot in Pakistan, notes Wood. “The BJP is now expected to get 41 of the 80 seats in India’s most populous state of Uttar Pradesh (UP), compared with the 29 seats expected by the same opinion poll in January,” he said.

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