Even as a section of the stock market didn’t expect BJP-led NDA to gain majority, the exit polls struck a surprise leading to a gigantic rally, said a veteran investor. Certain market participants were positioned for a coalition government and the possibility of a stable government nudged the investors to join the ongoing rally, Nirmal Jain, Founder & Chairman, IIFL Group, told ET Now in an interview. Furthermore, many investors were underowning shares and there were short positions as well in the bourses, he added. On Monday, both Sensex and Nifty recorded their best single-session gains in 10 years in absolute terms rising 1,422 and 421 points, respectively, even as they lost some gains today. The exit polls have predicted return of Modi government to the centre. Sharing advice for investors, Nirmal Jain said that investors may park their investment for a three to five year period to get high returns.
The investors could expect a strong stock market over the coming five years, he also said. Even though the market may consolidate, the Indian economy is all set to grow further. The set of reforms by NDA-I including the IBC, the bankruptcy law or GST and many other reforms have benefited the economy, he noted. The government may build on the reforms undertaken by it so far, he said, adding the second term of the government would be more productive as it has learnt lessons. The veteran investor also expected large capital flows into the markets both from global and domestic investors.
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On the issue of US-China trade war, Nirmal Jain said that India can be the ultimate beneficiary of the trade war issues and attract more global capital since China has remained the largest recipient of foreign investments. He also said that as infrastructure investment in China has saturated, India emerges as the most favoured destination for capital.