Indian equities reach unprecedented heights following predictions of a large-scale victory for Modi.
India's Stock Market Soars Following Election: Sensex and Nifty Rise Over 3%
India's benchmark Sensex and Nifty indices spiked by more than 3% in their early trade on Monday after the conclusion of the country's massive, months-long election.
In his victory speech, Prime Minister Narendra Modi announced, "With confidence, I can say that the people of India have voted to elect our government," noting the record voter turnout.
Modi, 73, promised to continue building on the robust economic growth he's fostered during his 10 years in office. Election results will be announced on Tuesday. In the 2019 election, Modi's Bharatiya Janata Party earned 303 seats in parliament. According to various exit polls, it seems the party may secure significantly more seats than anticipated.
Manish Chowdhury, head of research at StoxBox, remarked, "Based on exit polls surpassing expectations of 320-350 seats, markets have responded positively." He continued, "We anticipate amplified investments from both domestic and foreign investors in the future."
Strong Economic Stats Fuel Market Optimism
The stock market surge also follows India's recent release of impressive economic growth figures. The country reported a 8%+ GDP growth rate in the financial year ending March, solidifying its status as the world's fastest growing major economy.
India is anticipated to maintain an annual growth rate of at least 6% in the upcoming years, but analysts stress the need for 8%+ growth to establish the nation as a global economic superpower.
With a potentially substantial parliamentary majority, some believe Modi's government will implement key land and labor reforms to support further growth.
If sustained, this expansion could propel India closer to the top tier of the lucrative global economies. Some predict the nation will rank third behind the US and China by 2027.
Adani Group Rebounds
Adani Enterprises, a top company in the Adani Group, and Adani Power's share prices climbed 6.8% and 15.8%, respectively, on Monday.
Gautam Adani, the conglomerate's founder, re-ascended to the title of Asia's richest person during the last week, surpassing Mukesh Ambani, Reliance Industries' chairman. Both Adani and Ambani are widely known for their backing of Modi.
One year and a half following a scandal involving accusations of fraud by American short-seller Hindenburg Research, Adani bounced back. Adani rebuked the allegations as "unfounded" and "prejudiced." Recently, shares in some of his companies have soared to record levels, showcasing investor confidence in his strategic acumen, especially concerning sectors prioritised for development by Modi.
The NSE, India's stock exchange, soared past the Shenzhen Stock Exchange and Hong Kong Exchange to become the world's sixth largest bourse. The total market value of publicly listed companies in India breached $4 trillion last year.
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Following Modi's predicted large-scale election victory, investors are showing increased interest in investing in the Indian business sector.
With Modi's BJP party expected to secure a significant number of seats in the parliament, foreign investors might significantly increase their investments in Indian businesses.
