“PM Modi Urges Citizens to Embrace Risk as He Predicts Record-Breaking Stock Markets on June 4”

In a television interview aired on Sunday, Prime Minister Narendra Modi confidently predicted a strong stock market performance following the election results. “The day the election results are announced, traders will be exhausted from the volume of transactions,” Modi remarked. Responding to concerns about market nervousness related to the election outcome, Modi asserted, “Our government has implemented significant economic reforms and pro-entrepreneurship policies to strengthen the economy. We began with the Sensex at 25,000 points, and now it has reached 75,000 points. Increased investment from common people is beneficial for the economy, and every citizen should have a higher risk appetite.” He also noted the recent rally in public-sector undertaking shares.

Since the elections began on April 19, Indian equities have experienced turbulence due to worries that the National Democratic Alliance (NDA) might not secure the numbers needed for expected reforms. India Vix, a market volatility index, has surged 47 percent since the elections started.

Modi’s assurance of a market rally follows similar statements from three senior Cabinet ministers about market stability. Analysts view Modi’s statement as a signal of confidence in the ruling party’s return with a strong majority. U R Bhat, co-founder of Alphaniti Fintech, stated, “This isn’t so much a comment on the market as it is on the ruling party’s confidence in securing a strong majority. Markets typically wait for specific policy actions rather than political statements.”

Last week, Modi praised the equity market’s growth over the past decade, highlighting Mumbai as India’s economic powerhouse. “Look at the equity market’s growth over the past 10 years. Today, millions of small investors are connected to the stock markets. We are the fourth-largest stock market, and global investor trust is increasing. The Opposition wants to undermine this trust,” he said.

Union Home Minister Amit Shah and External Affairs Minister S Jaishankar have both assured that any market volatility caused by election uncertainty is temporary. Shah encouraged investors to buy stocks, predicting a market surge post-June 4. Jaishankar expressed confidence in the election’s direction, predicting reduced market volatility as results draw closer. Finance Minister Nirmala Sitharaman also emphasized that financial markets favor stability and predictability in policies, dismissing concerns about election-related market jitters.

In a note, Investec remarked, “This election isn’t driven by a single dominant issue affecting voter sentiment. The observed drop in voter turnout may involve various factors and may not decisively favor any party.”

Overall, Modi and his Cabinet’s reassurances aim to bolster investor confidence and emphasize the government’s commitment to economic growth and market stability.