May 24, 2024 09:10 AM IST
Bernstein said that the rally could push Nifty 50 past the 23,000-mark and would be followed by profit-taking.
Bernstein said that the Indian stock market could witness a short-term rally if the Bharatiya Janata Party (BJP) returns to power with 330-350 seats. This has a high probability, the global research firm said, predicting that the rally could push Nifty 50 past the 23,000-mark and would be followed by profit-taking “as the reality of execution and valuations emerge.”
Which stocks could outperform as per Bernstein?
Read more: Bernstein’s poll prediction: Nifty can give double-digit returns in 2024 if BJP wins…
Bernstein noted that expects infrastructure, manufacturing, domestic cyclical sectors, some financials, and state-owned enterprises (PSUs) could outperform. Although, consumer and IT sectors are likely to underperform and small and midcap stocks may outshine large-caps for some time.
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Continuity of power is the suggested factor behind the market rallying in November/December 2023, it said. Highlighting the role of government in managing capital expenditure, the report said, “A change will likely deliver haphazard growth with the risk of a shorter upcycle with structural challenges after that for those linked to capex.”
Read more: Ace investor Ruchir Sharma on stock markets after poll results: ‘If BJP doesn’t win…’
4 possible outcomes for elections and impact on stock markets as per Bernstein
Bernstein said that there could be an impact on the stock markets in case of four possible election outcomes:
Read more: How did the Indian stock market react to elections in the past?
- If NDA wins over 340 seats, there could be an immediate market rally followed by short-term profit booking.
- If NDA wins 290-340 seats, mild profit booking near term is possible.
- If NDA wins 270-290 seats, the markets could see moderate to heavy profit booking near term.
- In case NDA wins fewer than 270 seats, heavy profit booking near term would be witnessed.
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