Indian stock market likely to see profit booking after Lok Sabha elections 2024, says Bernstein

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Also Read: Bajaj Finance share price correction provides attractive entry point, says Emkay Global; sees 23% upside Eventually, the macro story will take over, and as it stays healthy, the analysts expect modest downsides. They expect manufacturing and capex stories will remain a key theme irrespective of the seats garnered. The brokerage house noted that some polls project as high as 411 seats of the ruling National Democratic Alliance (NDA), and given the recent performance in state elections and the results of almost all major opinion polls, 390-400 seats have become the new base case.

“A correction is inevitable, and markets that are simply looking for a reason to fall may overreact to a sentiment that may not mean much rationally. On the face of it, 300 seats will still mean the ruling party getting the absolute majority, and a construct similar to 2019, which is, in fact, a continuity of power as well as a continuity of extent of power. Still, it will be seen as a “below consensus" result, and a reaction cannot be denied," the analysts said.

Also Read: Vijay Kedia picks up stake despite LIC booking profit in Anil Ambani-led Reliance Infra during Q4FY24 This can eventually start the end of the current market frenzy, which has lasted for a full year, they added. The domestic stock market started the year 2024 at record valuations, particularly in the small and mid-cap space. After continuing the run in January, February and March seemed to return some normalcy to the valuations, but this month has picked up again, with small caps up 4% and mid-caps 2%.