India’s Prime Minister: Narendra Modi
PM Modi, has predicted that the stock market will boost significantly after election results. He expressed a lot of confidence on NDA led by Bharatiya Janata Party (BJP) government to maintain power with a huge majority for its third term.
Within a week after the election results on 4th June, PM Modi declared during an interview with NDTV Profit that there would be a rally in the stock market because the government policies have had positive impacts towards investor confidence.
“Those who punch trades will get tired,” he replied when asked about if markets are nervously awaiting the election outcomes especially since they seem to have priced in a BJP-NDA win.
Expectations and Market Volatility
BSE Sensex indexes and NSE Nifty 50 indices have recorded significant volatility lately. The Nifty fell over four percent to 21,821 from early May high of 22,794.7 but has since recovered to 22,500.
Concerns over the election results are driving this volatility according to market analysts. India VIX which is one measure of how volatile it is in the markets almost doubled in just three weeks from its recent swing low; now it stands at more than twenty. In history’s past elections’ month just before then vix was as high as 29 points which mean that sensitivity level of those markets were very high.
However, despite all these words meant at boosting investors’ morale by PM Modi such sense of uncertainty shall continue till these general elections results are announced according to experts.
Read Also: Amit Shah Predicts Market Rise on June 4
Increasing value of PSU stocks
He also underlined buoyant state-run company stocks as evidence of the nation’s economic strength. “Look at where PSU companies share rates have reached today. Once upon time PSU shares used equal fall in prices but now their values have shot up incredibly on the stock exchange. Just take HAL for example – last quarter it made a profit of Rs 4,000 crores.” PM Modi said
Economic Reforms and Stock Market Growth
“Our government has implemented extensive economic reforms,” said PM Modi. “Pro-entrepreneurship policies have strengthened the economy. We started at 25,000, and now the Sensex has reached 75,000,” he said in relation to the sharp rise in share markets during NDA government’s two terms since it came to power in 2014.
According to him this would make our economy stronger as more ordinary people participated in stock market. “I want their risk taking capacity to expand” he concluded.
Read Also: Cipla Shares Jump 4% as Promoters Sell 2.53% Stake
Senior Ministers Providing Reassurances
PM Modi’s sentiments come after three senior cabinet ministers had offered similar reassurance about stability of markets. In a rally address last week, PM Modi lauded the growth of equity markets over the past decade by pointing out that there were far many small investors while India is currently fourth largest share market with growing trust from global investors. Union Home Minister Amit Shah and External Affairs Minister S Jaishankar also addressed market concerns attributing recent turbulence to election jitters and predicting a post-election rebound. In fact Shah noted that worse crashes occurred on previous occasions when bourses suffered long drawn declines; he thus urged traders buy stocks today so that they can reap big after June 4th because slight movements are expected again.
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