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How is stock market gearing up for general elections 2019?


Present scenario of the market is that there is a strong government at the center and the ruling party has won three state elections in North East. BJP won Tripura, Nagaland and Meghalaya and it is already in power in Assam, Arunachal Pradesh and Manipur. BJP has no presence in the three states it won in 2013 elections.

But these three states contribute a very small number in Parliament. Experts are of the opinion that winning these states would boost the confidence and party’s position for the general elections in May 2019. With these states in the kitty, BJP seems to be becoming a true national party with presence from Assam to Gujarat.

Stock market is sensitive towards growth and inflation and not with single party or coalition. Before the national elections, Karnataka, Rajasthan and Madhya Pradesh will go to the polls. And these will be crucial elections that would reflect the public mood. Experts are carefully watching the performance of political parties and alliances in these elections to anticipate the bigger picture of general elections.

Indian stock market went through rough weather in recent months but the general election 2019 is a reason to cheer and the market has all it hopes pinned on Narendra Modi re-electing to the PM’s chair. The single party majority in center provided the stability needed for sustainable growth. Also, the BJP governments in center and states have plenty of time to fuel development and give incentives to corporate houses in the run-up to general election.

The global investment firm UBS caps mid-term growth of India above 7% and the reasons provided for high growth rate are the many economic and institutional reforms carried out of Narendra Modi government. These reforms are implementation of GST that is the new indirect-tax regime, increased digitalization, measures to curb black money, the new bankruptcy code and creating environment for doing business.

The market has already announced Narendra Modi as a winner but there is doubt whether BJP would be able to form government at the center without coalition. The stock market experts are tight lipped about the next wave of reforms that can further build confidence of stock investors.

PM Narendra Modi has an uphill task of getting full majority in center in order to get the power to lead the stock market for next five years. But market has posed its faith in the policies and reforms of Narendra Modi led government.

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