How Indian shares fare this year will depend heavily on the outcome of national ...
BENGALURU - How Indian shares fare this year will depend heavily on the outcome of national elections in May, with market experts polled by Reuters saying a majority win for the ruling party would be the most favorable outcome for equities.
The absence of a 2019 rally partly driven by increasing uncertainty before the election, reflected in a second consecutive cut to 2019’s outlook in the latest quarterly Reuters poll of 50 equity strategists. Late last year, the ruling Bharatiya Janata Party lost power in three key states, handing Prime Minister Narendra Modi his biggest electoral defeat since he took office in 2014.
If the BJP wins a majority of seats, that would help the BSE Sensex gain over 7 percent in the election’s immediate aftermath, according to strategists who answered an additional poll question. An alliance of regional parties would be the worst outcome, knocking the market down 7.5 percent in the vote’s immediate aftermath, according to the poll replies.
The tepid outlook for Indian stocks also stems from a slowing domestic economy that has dampened investors’ interest in already over-valued stocks.
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