With exit polls for the 2024 Lok Sabha elections suggesting a comfortable majority for the BJP-led NDA, led by gains in East and South India and continued dominance in its traditional strongholds, Kotak Institutional Equities said that the new government is expected continue with its economic agenda of development, growth and liberalization. The report by the brokerage firm said that the government will focus on investment-led growth, with the recent large transfer of the RBI surplus enabling it to increase capex versus the interim budget.
“We believe that the government will continue its focus on key areas such as (1) affordable healthcare and housing, (2) energy transition, (3) infrastructure development (defense, railways and roads) and (4) manufacturing. We note that the government has already executed the bulk of the required reforms for incentivizing private investments,” analysts at Kotak Institutional Equities said while adding that in 2019, the BJP’s 100-day economic agenda focused on boosting investments.
In terms of markets, it said that the equity market is expected to be further energized by the polls. It noted that stocks with large leverage to the government’s economic agenda (investment, PSUs) have delivered spectacular returns in the past 1, 3, 6 and 12 months. Also, with the BJP victory, the Indian equity market has seen a modest increase in volatility in the past one month, but India’s VIX, Kotak report said, is still lower than those seen during previous elections, suggesting less uncertainty regarding the election outcome among market participants.
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Per the exit polls, BJP-led NDA is predicted for a comfortable victory. Based on the exit polls, the NDA is likely to gain seats in South India, Odisha and West Bengal, lose a few seats in Bihar, Maharashtra and Karnataka and retain seats in its traditional strongholds.
From: financialexpress
Financial News
