Stock market will 'shoot up' on June 4 after PM Modi's victory: Amit Shah

The Indian stock market will 'shoot up' after the Lok Sabha elections 2024 results are announced on June 4, said Union Home Minister Amit Shah and encouraged investors to buy before that

In an exclusive interview with a leading media channel on Monday, Union Home Minister Amit Shah cautioned against linking recent stock market fluctuations with the 2024 Lok Sabha elections. Shah, a key figure in India's political landscape, urged investors to consider purchasing stocks before June 4, the pivotal date for the Lok Sabha election results. Expressing optimism, Shah forecasted a surge in the domestic stock market in the forthcoming period.

"I can't anticipate stock market moves. But normally whenever a stable government is formed at Centre, the market sees a rally. I see 400-plus seat wins for the Bharatiya Janata Party [BJP], a stable Modi government coming, and thus market rising," Shah told NDTV.

Shah's remarks coincided with the ongoing fourth phase of the general elections and a recent downturn in the benchmark Nifty index, which experienced declines in six out of the last seven sessions. Despite prevailing market uncertainties surrounding the election results, Shah remained steadfast in his outlook.

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In the financial realm, Nomura India pointed out the probability of a BJP victory based on recent opinion polls, anticipating policy continuity post the 2024 general elections. 

"The government may focus on the more politically contentious reforms around the factors of production including land, labour and capital; judicial reforms; and simplifying direct and indirect tax administration, including bringing electricity, oil and gas and alcohol under the GST ambit. The government is also likely to further focus on improving the ease of doing business for foreign investment and laying the groundwork for next generation sectors," Nomura was quoted as saying by Business Today (BT). 

MUFG Bank, on the other hand, offered a nuanced perspective, acknowledging the prevailing consensus regarding a robust BJP performance while also highlighting increased uncertainty due to lower voter turnout in the initial phases of the elections. The bank asserted that market sentiment should remain positive over time if the BJP secures a majority of seats, with expectations of policy continuity in critical areas.

Mirae Asset emphasised the importance of the July Budget in the event of a BJP victory, highlighting potential changes in taxation policies and agricultural schemes. Stressing long-term strategies, Mirae Asset underscored the significance of infrastructure development, agricultural reforms, and employment generation to stimulate demand from rural India.

Lastly, PhillipCapital identified a potential market rally in the event of the BJP-led National Democratic Alliance (NDA) surpassing the 400-seat target. The brokerage firm also advised investors to monitor subsequent election phases closely, recognising their potential impact on market dynamics.

"If a lower 300-330 seats for the NDA results in a knee jerk market reaction [a fall], we would treat it as a buying opportunity. A further worsening of voter turnout in the following election phases could have a bearing on election outcome and equities – so we would keep a close watch," the domestic brokerage said in its note.