Lok Sabha Elections 2024: Market may see sharp 20% decline if election results deviate from expectations -Experts

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Also Read- Greed & Fear: Correction on cards? Foreign investors may no longer be overweight on Indian equities, says Chris WoodIn the less probable event that the election results significantly deviate from market expectations, the stock market could witness a substantial 20% decline, said Sunil Damania, Chief Investment Officer, MojoPMS In such a scenario, the market might require up to six months to stabilize and return to pre-election levels, he added.Deepak Jasani, Head of retail Research at HDFC Securities also agreed that that if election results deviate from expectations and the ruling BJP led National Democratic alliance fails to form government, the markets can see a sharp downside, . The reforms may get a setback and the populist announcements by the parties may take centerstage hurting market sentiments, sadi Jasani.

There will be uncertainty about new reforms Also Read- Market to be disappointed if BJP falls short of PM Modi's prediction: ExpertsBernstein in its India strategy report has highlighted that the role of Government in facilitating orderly capex is high; hence, a return of NDA is favorable for that, while a change will likely deliver haphazard growth with the risk of a shorter upcycle with structural challenges after that for those linked to capex. Conversely, consumption may be more favorable in the case of opposition gaining strength, at least in the near term.

The downsides to that will be high inflation and fiscal discipline going off-target.In case the NDA fails to cross 270 seats milestone and BJP gets less than 240 seats, there will be return of Populism as per Bernstein.There will be drastic effects on infra spending in the near term as per Bernstein. The Funds will be diverted out of infra