Sensex and NIFTY Rally Signaling Modi’s Second Term As PM

Though yesterday Sensex declined by 400 points and the Indian equity market took a beating due to the rise in price of crude oil and weakening of the rupee, but it is believed that the best times are yet to come.

Yes! With elections around the corner, and Modi optimism prevailing around, Sensex and Nifty clocked more than the expected gains. Here’s a wrap of the last week,

Sensex and Nifty Rally Before Phase III of Elections

The S&P BSE Sensex profited by 0.96% at the end of the week and stood at 39,140.28 and NSE Nifty 50 Index rose to 0.94% and stood at 11,752.80. The benchmark indices also registered intra-day high during that period.

In fact, hopes of Modi returning back as PM have kept the foreign investors bullish in the Indian market along with the domestic audience. The foreign inflows into Indian equities were registered at $6.7 billion in January- March, more than reversing outflows of $4.4 billion in 2018. The NSE Nifty has increased by 7 per cent this year and around 63% since Modi took the reins in 2014. The exit polls have predicted that Modi’s BJP would be the winner of the election and if it will not happen, nervousness will prevail in the market.

I Have Never Felt More Bullish About Stocks But I Have No Money To Invest: Rakesh Jhunjhunwala https://t.co/Xo3UX3meNt pic.twitter.com/qDlnpPadV9— RJ Stocks (@RakJhun) April 20, 2019

The big structural changes like demonetization, the launch of GST had hurt the Indian economy and had led to downfall in growth, but it is believed that Modi could be the forerunner of India’s economic fortunes. Though India has not gained at an anticipated pace, but the investors are bullish that these efforts will pay them eventually.

The nearly 75% rise in Nifty 500 Index during Modi tenure also reflects how Modi has spearheaded the mind of investors from traditional investment options (real estate and gold) to share market after his ban on high value currency.

The Indian companies are also showing high valuations. On an average Nifty 500 index has traded at a P-E ratio of 18 in the past 5 years which is higher than 14.22 levels during the Congress government. In short, the companies, brokerage firms are also upbeat if Modi is elected once again.

His reforms, policies have truncated the Indian indices and it is believed that the government will leave no stone unturned to make India a corporate hub.