Bernstein’s latest report suggests Indian stock markets might experience a downturn post the 2024 Lok Sabha election outcomes. Amidst the media buzz, the report highlights ground realities in various states, such as Gujarat and Rajasthan facing community unrest and Punjab and Haryana witnessing farmer protests. Furthermore, the recent arrest of Delhi Chief Minister Arvind Kejriwal is stirring waves in the capital. Uncertainties loom over states like West Bengal and Maharashtra, making gains elusive.
Managing Director Venugopal Garre, along with Nikhil Arela, underscores the challenges of achieving ‘Plan 400’, especially considering the significant stakes in eight key states where the NDA secured almost 99% of seats in 2019. Even Prime Minister Narendra Modi’s ambitious projection of 370 seats for BJP and 405 seats for NDA in the Lok Sabha faces skepticism.
With the markets already witnessing a decline amid geopolitical tensions and US Federal Reserve commentary on interest rates, the prospect of NDA falling short of expected seats could trigger a market correction. Despite 300 seats ensuring an absolute majority, any deviation from the anticipated outcome may prompt an overreaction from the markets, potentially signaling the end of the current market euphoria.
