{"id":148899,"date":"2024-10-07T05:43:23","date_gmt":"2024-10-07T05:43:23","guid":{"rendered":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/10\/07\/bjp-is-looking-like-the-indian-stock-market-congress-like-the-chinese-market-guru-shankar-sharma-ahead-of-poll-results\/"},"modified":"2024-10-07T05:43:23","modified_gmt":"2024-10-07T05:43:23","slug":"bjp-is-looking-like-the-indian-stock-market-congress-like-the-chinese-market-guru-shankar-sharma-ahead-of-poll-results","status":"publish","type":"post","link":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/10\/07\/bjp-is-looking-like-the-indian-stock-market-congress-like-the-chinese-market-guru-shankar-sharma-ahead-of-poll-results\/","title":{"rendered":"‘BJP is looking like the Indian stock market & Congress like the Chinese’: \u200bMarket guru Shankar Sharma ahead of poll results"},"content":{"rendered":"
\"‘BJP<\/div>\n
As October 8 approaches, the votes cast in the assembly elections of Haryana and Jammu & Kashmir will be counted. The J&K elections, spread across three phases on September 18, 25, and October 1, and Haryana\u2019s single-phase election held on October 5, are being closely monitored for their political significance and potential market impact.<\/p>\n

The outcome of these elections is not just a political event but is also expected to have an impact on financial markets<\/a>. Motilal Oswal Financial Services Ltd<\/a> (MOFSL), in its latest strategy note, indicated that “the outcomes of the recent state elections in Haryana and Jammu & Kashmir, while not a needle mover, may keep the markets on edge, as exit polls predicted losses for the BJP in both Haryana and Jammu & Kashmir.”<\/p>\n

Market guru Shankar Sharma<\/a> weighed in on the potential impact of the elections on India\u2019s financial landscape. In a tweet, he said, \u201cIn a stock market sense, BJP is looking like the Indian stock market, and Congress, like the Chinese stock market,” drawing a comparison between the two major parties and the stock markets of India and China.<\/p>\n

\n
\n

\u2014 1shankarsharma (@1shankarsharma) <\/p><\/blockquote>\n<\/div>\n<\/div>\n

This comes as ahead of the the LS election results, Nifty has experienced volatility over two quarterly corporate earnings reports this year. Although the index is only up 142 points for the calendar year, it managed to reach an all-time high of 23,338.7 on June 3. Notably, on July 4, the benchmark BSE Sensex surged by 3.4%, closing at a new peak after exit polls indicated a strong BJP victory in the general elections. However, that same day, equity markets witnessed a bloodbath, with Nifty and Sensex declining nearly 6%, while Midcap and Smallcap indices slipped as much as 8%. This marked the worst single-day fall in four years.<\/p>\n

Jammu & Kashmir’s First Post-Article 370 Elections<\/h2>\n

The elections in Jammu & Kashmir are particularly noteworthy, as they are the first since Article 370, which granted special status to the region, was revoked in August 2019. The abrogation led to the bifurcation of the state into two Union Territories \u2013 Jammu & Kashmir and Ladakh. These elections are therefore seen as a critical step in re-establishing democratic processes in the region.<\/p>\n

The contest in J&K is primarily between the Congress-National Conference alliance, which is seeking to regain ground, the People’s Democratic Party (PDP), and the BJP, all contesting separately. Exit polls suggest that the Congress-National Conference alliance is likely to secure a substantial portion of the 90-seat assembly, while the BJP is projected to fall short of expectations.<\/p>\n

Also Read: <\/strong>Haryana and J&K Assembly Election 2024 Result date, when, and where to watch it live<\/a><\/p>\n

Haryana\u2019s Political Dynamics<\/h2>\n

In Haryana, the assembly election featured a diverse range of political contenders. The ruling Bharatiya Janata Party (BJP) is seeking a third consecutive term, with a key contest against Congress, the Aam Aadmi Party (AAP), and alliances like the Indian National Lok Dal-Bahujan Samaj Party (INLD-BSP) and the Jannayak Janta Party (JJP)-Azad Samaj Party (ASP).<\/p>\n

According to exit polls, the BJP could see a significant reduction in its seat tally compared to the 2019 elections, with the Congress poised to make substantial gains. The CVoter exit poll suggested that the Congress could win between 50-58 seats, securing a full majority in the 90-member assembly, while the BJP may fall to 20-28 seats, down from 40 in the previous election.<\/p>\n

MOFSL further pointed out that the Indian market is currently experiencing a \u201cgenuine tug-of-war between the headwinds and tailwinds.\u201d On the one hand, external factors like China\u2019s monetary stimulus have resulted in Foreign Institutional Investor (FII) outflows from India, while on the other hand, corporate earnings growth, which had seen strong performance for the past four years, is beginning to slow.<\/p>\n

Economic Indicators and Corporate Performance<\/h2>\n

According to MOFSL\u2019s report, earnings revisions for Indian companies have turned negative, with a 6% downgrade in Nifty\u2019s earnings per share (EPS) since July 2024. High-frequency indicators, including power demand, Purchasing Managers’ Index (PMI) data, GST collections, and automobile sales, all point to softening demand across sectors. Additionally, the report noted that corporate earnings growth, particularly in the commodities sector, has started to moderate.<\/p>\n

Despite these headwinds, there are potential catalysts for growth. MOFSL highlighted that the festive season and better-than-expected monsoon rainfall from July to September could boost rural consumption in the near term. Furthermore, the global monetary environment, where central banks such as the U.S. Federal Reserve have shifted towards monetary easing, could be favorable for riskier assets, including equities.<\/p>\n

For the September quarter, MOFSL projected Nifty earnings to grow by 2% year-on-year. However, excluding global commodities, the growth rate for Nifty earnings is expected to be around 10%. Profit margins for Nifty companies, excluding financials, are likely to see a 40-basis point contraction, bringing margins down to 20%.<\/p>\n

Sector-Wise Performance and Stock Picks<\/h2>\n

MOFSL remains optimistic about certain sectors, identifying ICICI Bank<\/a>, HDFC Bank<\/a>, Larsen & Toubro (L&T), HCL Technologies<\/a>, Hindustan Unilever<\/a> (HUL), Mahindra & Mahindra (M&M), Power Grid<\/a>, Titan Company Ltd<\/a>, Bharti Airtel<\/a>, and Mankind Pharma<\/a> as its top picks among large-cap stocks. In the midcap and small-cap segments, the brokerage firm favors Indian Hotels<\/a>, Angel One, Godrej Properties<\/a>, Persistent Systems<\/a>, Metro Brands<\/a>, PNB Housing<\/a>, Global Health<\/a>, Cello World, Dixon Technologies, and Five Star Business Finance.<\/p>\n

Election Result Day 2024: Vote Counting Process<\/h2>\n

The official vote counting for both Haryana and Jammu & Kashmir will begin at 8 am on October 8. Counting agents from political parties and poll officials are required to arrive at the centres early, with preparations starting as early as 5 am. The counting process will begin with postal ballots, which are typically used by groups such as people with disabilities, government officials, and security personnel.<\/p>\n

Once the postal ballots are counted, votes recorded on Electronic Voting Machines (EVMs) will be tallied. While initial trends may emerge by noon, a clearer picture is expected to develop by late afternoon. Results for individual constituencies will be announced as soon as the counting is complete, with the winning candidate determined by the first-past-the-post system.
<\/p>\n<\/div>\n