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Prime Minister Narendra Modi predicted a significant boost to the stock market following the election results, expressing confidence in the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government retaining power with a strong majority for a third term.
“You will see that within one week after June 4, the day election results are to be declared, market participants will get tired,” PM Modi said in an interview to NDTV while hinting that the market will hit fresh record highs.
“We started our journey from 25,000 (Sensex) and have reached 75,000. This increases our pride in the world. As more ordinary people come to the market, the economy will gain a lot of strength. I want the risk-taking capabilities of citizens to increase,” Modi said.
While giving the example of the rally in PSU stocks, he said look at Hindustan Aeronautics (HAL) which is on a “stellar run” as its stock reached a record high on massive profits.
Benchmark indices BSE Sensex and NSE Nifty 50 have been volatile recently. The Nifty fell more than 4 percent to 21,821 after hitting an all-time high of 22,794.7 in early May. It has since recovered to 22,500.
Market analysts note that concerns over the election results are causing significant volatility. The India VIX, a measure of market volatility, doubled to over 20 in just three weeks from its recent swing low. Historically, the VIX has risen to as much as 29 ahead of elections, indicating heightened market sensitivity.
While Modi’s assurances aim to bolster investor confidence, experts caution that volatility may persist until the general election results are announced.
Modi’s assertion about the markets follows similar assurances from three senior cabinet ministers regarding market stability. Last week, addressing a rally, Modi praised the growth of equity markets over the past decade, highlighting the significant increase in small investors and noting India’s status as the fourth-largest stock market with growing global investor trust. Union Home Minister Amit Shah and External Affairs Minister S. Jaishankar also addressed market concerns, attributing recent turbulence to election jitters and predicting a post-election rebound. Shah emphasised that past market declines were more severe and encouraged investors to buy stocks in anticipation of a surge after June 4.
