Home » Stock » Pre-poll stock market rally likely, say experts

Pre-poll stock market rally likely, say experts

Analysts noted that the pace of reforms never stops irrespective of the party that comes to power. Historical data suggest that stock markets usually perform well in the first 15-18 mth of the new govt.

NIM CET 2019 released the application on official website

Representative image

New Delhi: Indian shares witnessed a sharp rally on Monday following the announcement of general election 2019 dates on Sunday by the Election Commission of India (EC). The Sensex was up 300 points or 0.82% at 36,974 while the Nifty50 index traded 0.99% higher at 11,145 as of 12 pm.

According to a report in the Economic Times, a pre-poll rally is very much likely as analysts believe the prevailing geopolitical issues may be more in focus than the economic factors that will favour the incumbent Narendra Modi government.

Analysts noted that the pace of reforms never stops irrespective of the political party that comes to power. The ET report citing historical data said that stock markets usually perform well in the first 15-18 months of the new government.

Now that the election bugle has been sounded, it is beginning of the end of uncertainty, VK Sharma, Head – PCG & Capital Market Strategy at HDFC Securities, told ET. Sharma, who sees a pre-election rally, said: “About one-third of the money that you put in now should be booked, if the stocks rise more than 10% from here.”

According to Sharma, there is more risk of not being in the market. “Those who have doubts can continue with their SIPs. But actually there is no logic in waiting for the election results,” he said.

Ajay Bodke, CEO at Prabhudas Lilladher (PMS), also has similar views. “There is a broad bipartisan consensus underpinning major structural reforms in India. The genesis of some of the biggest structural reforms such as the IBC, Aadhaar and GST among others lies in the previous regimes. Some reforms find their genesis in the Manmohan regime, while others go back to Vajpayee’s. It is naive to believe a wholesale reversal in the reform process even if there is a change of guard after the polls,” Bodke told ET.

Most bills need approval from both the houses. The NDA government does not enjoy a majority in Rajya Sabha, yet the reforms went through, he noted.

The expert said that irrespective of the nature of the coalition in power, the market has chugged along and delivered positive returns in the first 15-18 months post election outcomes. “To believe that the market may take a beating if a coalition is formed; facts just tell otherwise,” he added.

[“source=timesnownews”]

Please follow & like us

RSS
Follow by Email
Facebook
Google+
https://livebigcommunity.com/pre-poll-stock-market-rally-likely-say-experts">
Twitter