By Bloomberg News
Indian stocks need Prime Minister Narendra Modi’s party to win more than 303 seats in the general election to extend their record rally, according to a Bloomberg News survey of market participants.
“If he were not to win, that would create some uncertainty and put some pressure on valuation,” Henry Mallari-D’Auria, chief investment officer for global and emerging markets at Ariel Investments LLC, said in an interview. “At this time, there is little uncertainty about the outcome of this election.”
Indian equities have risen to records, while the currency and bond markets are near their highest levels in over two months days ahead of the election results on June 4.
Meanwhile, global funds have pulled $2.9 billion from local shares this month. Indian equities have trailed peers in Asia this year as rich valuations of about 20 times 12-month forward earnings and elections jitters deter foreign investors.
Still, some participants foresee stock benchmarks rallying at least 20 per cent should Modi fulfill his promise of his party and its allies winning more than 400 seats.
“The robust economic momentum combined with a larger global trade footprint by the PM suggest that on balance – a bigger majority versus elections five years ago,” said George Boubouras, managing director at K2 Asset Management Ltd. The Melbourne-based asset manager anticipates a “double-digit positive rally if BJP wins more than 400 seats.”
First Published: May 29 2024 | 6:49 AM IST
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