Indian stock market soars to new heights following exit polls indicating a strong Modi victory
The Indian stock market reached unprecedented levels on Monday amidst forecasts of a decisive win for current Prime Minister Narendra Modi in the upcoming national elections. Investors are optimistic about the future trajectory of the market as Modi's potential re-election gains momentum.
Indian stock markets hit new record highs on Monday as experts anticipated a strong win for current Prime Minister Narendra Modi in the national elections. India’s main stock indices, the Sensex and Nifty 50, closed at their highest levels ever, with both posting gains of over 3%.
The surge in voting turnout occurred after India completed its extensive election over the weekend. Prime Minister Modi expressed his confidence in the people of India, stating that they had voted in large numbers to reelect the government.
The 73-year-old highlighted his economic achievements over the last decade, a time when India experienced strong growth.
Results of the election will be announced on Tuesday. In the previous 2019 election, Modi's party secured 303 seats in parliament. Analysts attribute the current market optimism to various local exit polls indicating a significant increase in Modi's victory margin this time around.
Employees work on a mobile phone assembly line at Padget Electronics Pvt., a subsidiary of Dixon Technologies Ltd., in Noida, India, on Friday, March 22, 2024.
Employees work on a mobile phone assembly line at Padget Electronics Pvt., a subsidiary of Dixon Technologies Ltd., in Noida, India, on Friday, March 22, 2024.
Prashanth Vishwanathan/Bloomberg/Getty Images
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India's economy is booming as the election nears its end. "The exit polls are predicting around 370 seats, surpassing the expected range of 320-350 seats. This has led to a positive reaction in the markets," stated Manish Chowdhury, the head of research at brokerage StoxBox.
"We anticipate increased investments from both local and international investors in the future," he mentioned.
Moreover, the rise in stock prices follows the release of impressive economic growth figures last Friday. India's economy grew by over 8% in the fiscal year ending in March, solidifying its position as the world's fastest growing major economy.
The country is in a good position to grow by at least 6% annually in the next few years. However, experts suggest that reaching a growth rate of 8% or higher is necessary for the country to become an economic superpower.
Investors are optimistic that if Modi secures a significant majority in parliament, his government will introduce important land and labor reforms that are essential for the country's future growth.
India's sustained economic growth is expected to propel the country to become the world's third-largest economy by 2027, trailing only the United States and China.
Adani has regained the top position.
Shares in Adani Group, which operates in ports and power sectors, saw a significant increase on Monday. Adani Enterprises, the main company of the group, rose by more than 7%, and Adani Power also experienced a 16% increase.
In the previous week, Gautam Adani, the founder of Adani Group, surpassed Mukesh Ambani, the chairman of Reliance Industries, to reclaim the title of Asia's wealthiest individual, as reported by the Bloomberg Billionaires Index.
India has its Rockefellers and Carnegies.
India has its Rockefellers and Carnegies.
Photo Illustration by Alberto Mier/CNN/Getty Images
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Billionaires like Ambani and Adani cannot single-handedly make India wealthy, despite their close ties to Prime Minister Narendra Modi. Adani, in particular, has seen a significant increase in his wealth following a difficult period for his group, which was accused of fraudulent activities by Hindenburg Research.
Adani dismissed Hindenburg's report as unfounded and harmful.
Following this, the business magnate has experienced a remarkable resurgence, with stocks in his companies reaching all-time highs. Investors are delighted by his skill in strategically investing in sectors that are emphasized for growth by Modi.
The stock markets in the country have done well while he was in charge. Late last year, the total value of companies listed on India's exchanges went over $4 trillion. According to data from the World Federation of Exchanges, earlier this year, the National Stock Exchange of India (NSE) became the sixth largest stock exchange globally, surpassing both the Shenzhen Stock Exchange and the Hong Kong Exchange.
Editor's P/S:
The Indian stock market's record-breaking performance on Monday reflects the optimism of investors and analysts regarding the potential for strong economic growth under the leadership of Prime Minister Narendra Modi. The surge in voting turnout and exit polls predicting a significant increase in Modi's victory margin have bolstered confidence in the stability and direction of the country's economy. This optimism is further supported by India's impressive economic growth figures, which position it as the world's fastest-growing major economy.
The resurgence of Adani Group, with Gautam Adani regaining the title of Asia's wealthiest individual, highlights the close ties between the business community and the government. Adani's strategic investments in sectors emphasized for growth by Modi have been instrumental in his success. The overall performance of the stock market under Modi's leadership indicates the confidence of investors in the government's policies and the future prospects of the Indian economy.
