Even though they may remain volatile in the run-up to the polls as political parties stitch up alliances, the long – term trajectory for the markets remains up, they believe.
Markets are already pricing in a victory for the Narendra Modi – led National Democratic Alliance (NDA) in the upcoming general elections, analysts say. Even though they may remain volatile in the run-up to the polls as political parties stitch up alliances, the long – term trajectory for the markets remains up, they believe.
“The events of the past eight weeks on the political front including various pre-poll formations, the farmer cash transfer scheme and the military action across the border may cause polarisation in the forthcoming general elections and increases the probability of a stronger government,” says Ridham Desai, head of India research and India equity strategist at Morgan Stanley in a co-authored report with Sheela Rathi
Oil prices and political uncertainty – the two main reasons why the Indian bourses underperformed in the calendar year 2019 (CY19) – have already hit a peak in terms of negativity, they believe.
“Growth is moving higher with PMIs in clear expansion zone, credit growth at multi-year highs, corporate revenue growth at almost a 20-quarter high and corporate profits at 25-quarter highs. In summary, the Nifty could be looking to break its 10,500 – 11,000 range to the upside,” Morgan Stanley says…
