Even as the election results day draws nearer, stock markets will look forward to continuity and stability at the centre, according to experts. The return of a Narendra Modi-led BJP is expected to provide that stability, as the government will continue to focus on capacity creation through infrastructure, Naveen Kulkarni, Head of Research at Reliance Securities told Financial Express Online. According to the expert, cement companies and corporate banks like ICICI and Axis are good ideas to focus on, in case one is betting on a Modi win.
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The banking stocks have emerged as the leader of the current bull run, and it will continue to outperform if NDA comes into power again, according to Mr Amit Gupta, Co-founder & CEO, of Trading Bells. “Some other sectors which will particularly attract Institutional Investors’ interest are Power, Infrastructure, Real estate & Capital goods sectors, as economic reforms will continue smoothly and there would be an increase in both private and public investments,” he said in a note to Financial Express Online. Further, PSU stocks are also likely to do well if the incumbent government retains majority at the centre.
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Taking stock of the current situation in the stock market, Naveen Kulkarni said that there has been a pre-election rally and Q4FY19 results are seeming to be a mixed bag. Further, consumption slowdown is evident and management commentary of various companies has been cautious, he noted. Therefore he advises investors to hedge the existing market position or trim exposure to high beta sectors like NBFCs and others.
According to investment advisor Sandip Sabharwal, the probability of a Congress win is extremely low. Therefore, the possibilities will be a NDA win or fractured mandate. “NDA win will boost all domestic economy linked stocks. A fractured mandate can lead to a 8-10% market selloff,” he told Financial Express Online.
The Sensex and Nifty will go down ‘without a doubt,’ in case current prime minister Narenda Modi doesn’t return to power, according to CLSA’s Chris Wood. It has become more likely that we will see a BJP-victory with a reduced majority, he told in an interview to ET Now. “The stock market’s ideal outcome would be as big a majority as possible for the current government,” Chris Wood told the channel.
(Please consult your financial advisor before taking any investment related decision)