'Market is going to shoot up after June 4': Amit Shah attributes volatility to 'rumours'

Union home minister Amit Shah sees the market shooting up after June 4, when the results for 2024 Lok Sabha elections are announced. Shah is unperturbed by the uneasiness in the bourses over the poll outcome. Sensex tanked 742 pts to 71,922  in early deals on Monday as unabated selling by FIIs continued. Auto, consumer durables and metal shares were the top losers in early trade. Nifty too slipped 194 pts to 21,861, reflecting weak investor sentiment on Dalal Street.

Voting for the fourth phase is currently on.  Shah told NDTV that connecting market movements to elections was not wise, attributing the fall to "rumours". "Buy before June 4. The market is going to shoot up," he told the TV channel. 

PhillipCapital in its latest note expects a strong rally if the BJP-led NDA hits the much-publicised 400-plus target. "If a lower 300-330 seats for the NDA results in a knee jerk market reaction (a fall), we would treat it as a buying opportunity. A further worsening of voter turnout in the following election phases could have a bearing on election outcome and equities – so we would keep a close watch," the domestic brokerage said in its note. 

PhillipCapital said the turnout in the first three phases has been a tad lower and while this could affect results for a few constituencies, it is unlikely to majorly dent the widely expected outcome of BJP returning to the power.

The turnout for Phase 1 stood at 66.1 and Phase 2 at 66.7 per cent. The Phase 3 saw 64.6 per cent voter turnout against the national average of 67.4 per cent seen in the 2019 elections. Out of the bigger states, Gujarat, Rajasthan, and Tamil Nadu recorded lower turnout vis-a-vis 2019 readings, followed by Kerala and Assam, while Karnataka’s was a tad higher. 

NDA walked the talk

"If we connect the 2019 manifesto and the actions undertaken by the Modi government over the first 100 days, we find a lot of connections. In a nutshell, they not only “talked the talk” but also “walked the walk”," Mirae Asset Capital Markets said in a recent note. 

Mirae sees insurance sector reforms involving granting a composite insurance license to a single entity, which allows them to offer both life and non-life products. Countries like Singapore, Malaysia, and the UK allow such entities.

The Ayushman Bharat Yojana currently covers 100 million poor households. The BJP, in its 2024 manifesto, took a 'sankalp’ to include every individual above 70 under the scheme. "The current scheme provides insurance coverage of Rs 5 lakh per poor household every year. The coverage amount can be increased to Rs 10 lakh in the upcoming July budget. An additional outlay of INR 50 billion might be required for this," Mirae said.

Mirae sees a new interest subsidy scheme for affordable homes. It cited the interim Budget for FY25, where the government increased the allocation for the PM Awas Yojana to Rs 80,670 crore. 

"This was 48 per cen higher than the revised estimate of Rs 54,000 crore  spent in FY24. In the full year July budget, we can expect lower interest rates to further drive growth in the real estate sector," Mirae said.

Mirae expects an investment of roughly Rs 10-12 lakh crore in the next five years to equip Indian railways with modern, world-class facilities. This announcement, along with the Budget, can be expected. 

Notably, Rs 2.52 lakh crore was allocated in the FY25 interim Budget to build three major railway corridors to reduce congestion and logistic costs, Mirae noted. Mirae said the proposed amendments to the Special Economic Zones (SEZ) has a goal to revive SEZs and facilitate business transactions between them and the domestic market.