The BJP’s campaign slogan ‘abki baar char sau paar’ has positively influenced the stock market. The target of 400 seats is seen as a psychological extension of the NDA’s big win in 2019, where they secured 352 seats. The government’s strong performance during COVID has also boosted confidence. Over the last three months, the stock market has been optimistic, with pre-election polls averaging 375 seats for NDA. However, as voting progressed, predictions have adjusted to a range of 300-350 seats.
Two main factors have caused this adjustment. First, voter turnout data shows a 3% decrease compared to 2019 during the first three phases, raising questions about the strength of the ‘Modi Wave.’ Second, stronger regional politics has narrowed the forecast for a big majority win, possibly impacting BJP negatively.
High voter turnout is often seen as a sign of active democratic engagement and can indicate a desire for change, which could be bad for the current government. In 2014, the Modi wave increased voter turnout significantly. However, there are no major issues in India currently. The government is performing well domestically and internationally, with improving economic power and fiscal stability.
The biggest challenge is regional politics. For example, in Maharashtra, political drama and party splits have fragmented the landscape. Maharashtra is crucial for the NDA, which won 23 seats there in 2019. The BJP’s influence in southern states is also weak. Regional politics will play a big role in the final seat count for NDA.
Despite a slight drop in voter turnout, which improved from phase 4 onwards, the market seems to be overreacting. The overall reduction is only 1.4%, dropping from 66.9% in 2019 to 65.5% in 2024. This slight decline doesn’t necessarily indicate a shift in voter preference and could be due to factors like the heatwave affecting northern states.
The ‘Modi Wave’ continues, with voter turnout till phase 6 at 65.5%, much higher than the 58.2% in 2009. The 2014 slogan ‘achhe din aane waale hain’ (good days are coming) remains relevant. The market believes a leadership change is unlikely, so no major economic policy changes are expected, and India’s economic prosperity should continue. However, if NDA wins closer to 300 seats, there might be some disappointment, affecting sectors like defence, industrials, manufacturing, infrastructure, and PSUs. If NDA wins around 350 seats, these sectors are expected to continue their strong performance.
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