Share Market / If there is even a slight change in the election results, the figure could drop to below 10%

Vikrant Shekhawat : Jun 02, 2024, 08:31 AM
Share Market: Profit booking continues in the stock market before the election results. The last phase of voting ended on June 1. Exit poll results have also come out. Now is the time to answer the questions arising in the mind of the common investor, which are arising from the ongoing turmoil in the market. Let us try to understand how the market will react if which party forms the government? If the NDA government is not formed, how big a recovery will be seen in the market?

Little scope for a bumper rise in the market?

Rajesh Bhatia, Chief Investment Officer of ITI Mutual Fund, says that if BJP gets a majority like 2019, then there can be a surge in the equity market. According to a Business Today report, Karur Vysya Bank Treasury Head VRC Reddy said that the rupee may rise from 83.32 to 82.80 against the dollar at the time of closing on Thursday, while the benchmark bond yield may fall from the current close of 7 percent to 6.90-6.92 percent.

It will take a long time to recover from the decline

Kotak Alternate Asset Managers Chief Investment Strategist Jitendra Gohil has warned that if the NDA alliance fails to form the next government, the stock market may fall by more than 20 percent and it may take a long time to recover completely. He said that the possibility of such an outcome is low, but Gohil said that it would be wise for investors to diversify the portfolio and reduce the risk before the election results, as the gains may be limited, but the decline can be severe. This means that if everything goes as expected, there will not be a bumper boom, but if the figures change even slightly, there will be a huge decline in the market.

Can the decline come up to 10 percent?

Mitul Kalawadia, senior fund manager of ICICI Prudential Mutual Fund, told Reuters that the market is expecting continuity, so there can be a sudden reaction if another party wins. He said that whether things will be positive or negative in the long run, we will know later, but any change in the short term that affects the continuity of the policy level will be very negative.

According to a Reuters report, Abhishek Goenka of IFA Global said that he expects the benchmark stock market index to fall by up to 10 percent in such a scenario immediately after the decision, while Gaurav Dua of Sharekhan says that the decline can be up to 15-20 percent.