Indian equity benchmarks recovered after a steep decline in morning trades as it emerged that Prime Minister Narendra Modi’s Bharatiya Janata Party is set to win more seats in Gujarat than early leads indicated and form the government in the state.
The BJP got a majority primarily because of its corruption-free and development-focused policy, Nirmal Jain, chairman at brokerage IIFL, told BloombergQuint in an interaction. “The markets are positive on the long-term growth and the economy is on a path to a definitive recovery.”
Sanjiv Bhasin, IIFL’s executive vice president for markets, said benchmark Nifty is expected to touch 10,700 level by the end of this year. He also expects the market to move forward, driven by earnings and liquidity in the second half of the next financial year. Oil prices could be a worry, he said.
No disruption to reforms, says Ajay Srivastava
Today is the day where you change the narrative for the market and remove scepticism, Ajay Srivastava, managing director at Dimensions Corporate Finance, said. “With BJP leading, it tells us there will be no disruptions in the market due to the significant reforms.”
- Early movements in equity indices tell that there is a little fear and that is very good for the market.
- The focus should be towards jobs and the economy now.
- One segment which might take a possible hit is the oil marketing sector.
- If there are no disruptions, the Indian market is in for a 25 percent upside in the next financial year, with large-cap stocks driving the rally.
Early indicator of improving economic cycle: Ajay Bagga
Election results are an early indicator of an improved economic cycle and a bull market, independent market expert Ajay Bagga said. He expects 2018 to be a good year for Indian stocks.
- GDP, corporate earnings and corporate earnings-to-GDP ratio bottomed out in the last quarter.
- Optimistic since there was a lot of sceptisim going into next year.
BJP win positive for economy, investors: Porinju Veliyath
The victories in Gujarat and Himachal are significant as they show that voters have put their faith in the BJP despite the short-term pain, Porinju Veliyath, managing director at Equity Intelligence India, said. “This win is also pointing to a victory in 2019 for the ruling party. This is very positive for the country, economy and investors.”
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