A pre-election rally or correction: What’s Dalal Street bracing for this time?
This time around, the election has gained prominence in light of India’s rising importance in geopolitics, its leading position in emerging markets, and the government’s aspiration to make India the world’s third largest economy from the current fifth position.
But Dalal Street investors don’t seem to be very apprehensive about the outcome this time and are rather sure about a third term for the incumbent government, led by Prime Minister Narendra Modi.
“Our assessment suggests a high likelihood of a comfortable majority for the BJP-led
government, consistent with opinion polls...Given our assumption that the BJP is likely to secure power, we anticipate a continuation of their broad agendas outlined in the Manifestos of 2014 and 2019,” said Fisdom Research.
So far in 2024, the Nifty 50 is up just 1%, as unpleasant global factors and high valuations drove foreign investors out of Dalal Street. But the unprecedented inflows from domestic institutional and retail investors has restrained the downside.
In the first two months of 2024, DIIs have poured in Rs 52,354 crore into equities, whereas FIIs have sold stocks worth Rs 31,827 crore during the same period, according to data on StockEdge.
The unprecedented domestic inflows indicates the growing confidence among home investors on India’s economic growth and are rather discounting the election outcome.
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“The government has facilitated a balanced approach, with a lower fiscal deficit and capex-led
