BJP seat wins, election results 2024: Will PM Modi's '400 Paar' projection come true today? What stock analysts say

BJP seat wins, election results 2024: Will PM Modi's '400 Paar' projection come true today? What stock analysts say

Lok Sabha election results 2024: In the past two elections, exit poll projections did underestimate NDA seat wins. If history were to repeat itself and NDA gets more seats than a consensus 350-plus, it could bring more upside for the stock market.

Elections results 2024: Given the unanimity across all the exit polls, the formation of a stable NDA government is the most likely outcome, said one brokerage.
Amit Mudgill
  • Jun 04, 2024,
  • Updated Jun 04, 2024, 7:23 AM IST

Post a day of stock market rally, investors would be glued to television screens today to get an idea on the number of seats the Narendra Modi-led BJP wins in recently concluded Lok Sabha elections 2024. Exit polls have largely projected 350-plus seats for the BJP-led NDA while PM Modi himself hoped for an aspirational '400 Paar' in his election rallies. Interestingly, in the past two elections, exit poll projections did underestimate NDA seat wins. If history were to repeat itself and NDA gets more seats than a consensus 350-plus, it could bring more upside for the stock market. A disappointment or less than the 350-mark figure should bring short-term volatility to markets, analysts said.

"The election results will come out on June 4 and looking at the last two NDA wins, they have usually beaten most exit poll results. If that happens this time too, markets might see further upside, especially the PSUs and sectors like defence, power, manufacturing and renewable energy benefitting from the government's focus. Investors should stay invested although with caution now, as valuations have become pricier," said Paras Matalia, Fund Manager & Head of Equity Research, SAMCO Mutual Fund.

In 2014 and 2019 elections, exit polls had predicted the NDA seat counts, which were lower than the actual results but Nomura India said it would not be appropriate to extrapolate the past trend and suggest a larger NDA seats against the exit poll results.

"Nonetheless, given the unanimity across all the exit polls, we think the formation of a stable NDA government is the most likely outcome," it said.

Antique Stock Broking cited incorrect predictions of 2004 and 2009 general election, as well as in the recent 2023 state assembly elections of Chhattisgarh and Karnataka. To recall Sensex had crashed over 15 per cent on May 17, 2004, its biggest ever percentage fall ever, following a surprise NDA loss. On the other hand, stock indices had hit two upper circuits following UPA II's comeback on May 18, 2009. Markets don't like uncertainty -- it likes political continuity.

"In a few other instances, exit polls underestimated the NDA margin of victory in 2014 and 2019 general elections; and 2023 Madhya Pradesh state elections," Antique Stock Broking noted.

Emkay Global said even as exit polls are not definitive, the margin of errors have been lowered in the last two election cycles. "Final outcome, if in line with exit polls, would likely calm investor nerves as political and policy continuity will be good for risk assets in the immediate run and macro stability in the medium term.  

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
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