ruling Bharatiya Janata Party displayed on a hoarding prior ruling Bharatiya Janata Party displayed on a hoarding prior

“There’s going to be a correction, and markets that are just looking for an excuse to drop might react too strongly to a sentiment that may not have much rational significance,” Bernstein stated.


  • The world’s largest democratic election took place in India on Friday, when people began casting ballots for the general elections of 2024, hoping that Prime Minister Narendra Modi would win a third term in power.

India’s stock markets began the year at all-time highs, mostly due to pre-election excitement. However, as the nation began its weeks-long election process, Bernstein issued a warning that a potential market drop was imminent.

Market participants have been projecting that the Bharatiya Janata Party, under by Prime Minister Narendra Modi, will win.

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As prime minister since 2014, Modi is regarded as a candidate who will appeal to the market. India’s economy rose from being the fifth biggest in the world to the third largest by 2027 under his direction, with a GDP of $3.7 trillion.

After rising more than 20% in 2023—its ninth consecutive year of gains—India’s flagship Nifty 50 index has increased by 3% thus far this year.

On the other hand, due to geopolitical worries like the increasing tensions in the Middle East that have shaken world markets, the index has down almost 1.7% from its most recent record closing high on April 11.

In a client note, Bernstein analysts Venugopal Garre and Nikhil Arela stated, “A pre-election euphoria is building up, where the previously set expectations of continuity of power are further augmented by the ruling party coalition possibly winning over 400 seats.”

The world’s largest democratic election, held in India in 2024, saw people turn out to choose whether Prime Minister Narendra Modi would serve a third term in power. The general elections for that year began on Friday.

The Lok Sabha, the lower chamber of the Indian Parliament, will have 543 contested seats, and over one billion eligible voters will choose their representatives. The ruling party or alliance will take office if it receives at least 272 votes.

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It might be “inevitable” to correct.
The experts stated that “even repeating the historic performance of 2019 may not be enough this time” because of the “sky-high expectations” of a big mandate for the BJP and its coalition.

Based on their calculations, markets have already factored in a figure of over 350, or almost 400 for the NDA coalition.

“A correction is inevitable, and markets that are simply looking for a reason to fall may overreact to a sentiment that may not mean much rationally” if the BJP were to win 300+ seats and the larger NDA alliance win 350+.

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