modi: Exit poll: D-Street’s top voices reflect continuation of Modi 3.0’s policy reforms.

With exit polls showing a clear advantage for the Bharatiya Janata Party (BJP)-led NDA forces, higher-ups on Dalal Street believe that Prime Minister Narendra Modi’s reform policies will continue in his third term. They expect the government’s focus on infrastructure, defence, railways and other sectors to continue.

According to the opinion poll, the National Democratic Alliance (NDA) was expected to secure more than 350 of the 542 seats in the primary over 7 stages over 48 days.

The exit polls are estimates, but the vote counting will be conducted on Tuesday, June 4th.

Experts said:

CLSA
Even if the exit polls show that the BJP is in the polls, the final results are not yet out. Hong Kong brokerage CLSA said a favorable outcome would boost investor confidence in India’s economic growth. This could encourage investors to take this growth beyond Modi stock, which is a direct policy play. This was done to identify 54 stocks from a strong F&O basket of 183 stocks, which it claims will be part of India’s growth story. These stocks have been perceived as direct beneficiaries of PM Modi’s policies, half of which are PSUs. CLSA’s analysis shows that 90% of Modi stocks have beaten the Nifty in election-driven rallies over the past six months, while only 42% of other companies have performed better. L&T, NTPC, NHPC, PFC, ONGC, IGL, MAHGL, Bharti Airtel, Indus Towers and Reliance are Modi stocks preferred by CLSA analysts.Nomura
Now it is clear that the BJP/NDA has indeed secured a simple majority, but this should calm investor nerves. Nomura said in a note that this scenario would significantly ensure policy continuity, enable continued focus on capital spending while consolidating fiscal constraints, support macrofinancial stability and focus on inclusive growth. Given its growing share of seats in the House of Commons and the growing number of seats in the Senate, the government can focus on more politically contentious reforms centered on factors of production, including land, labor and capital.

In fact, early reports point to the digitization of land records and the simplification of labor laws in the 100-day agenda. Nomura added, “Although the market reaction will be different in a scenario with a BJP majority and a scenario with an NDA majority, in our view the overall direction of economic policy will still be broadly similar.”

JM Financial
Policy continuity will ensure opportunities in the defense and capital goods sectors, while providing valuation facilities in the private banking and consumer sectors. In this election cycle, unlike in the past, large-cap stocks are expected to outperform SMIDs (small and mid-cap stocks).

Emkay Global Financial Services
Seshadri Sen, research and strategist at Emkay Global Financial Services, recently told ETNow that the continuity of the current economic policy, i.e., if the BJP gets a majority of its own, or is close to it, will be maintained.

He also thinks the Modi government’s war on inflation will continue and does not think inflation will runaway in India if the BJP is re-elected.

In fact, they (BJP/NDA) were the ones who codified the RBI’s inflation targeting framework, and after a long time, the government and the RBI have been collaborating on how to adjust monetary policy to deal with high inflation.

(Disclaimer: Recommendations, suggestions, views and opinions provided by experts are their own and do not represent the views of The Economic Times.)