With the changing situation of the Indian elections, the Indian stock market this week is like riding a roller coaster; On Wednesday, the Indian stock market once again led Asia, as a key ally of Modi's political coalition, the "National Democratic Alliance," confirmed that it will support Modi in forming the next government. This largely alleviates the market's concerns. Product structure, INR 1-3 billion product revenue was INR 401/1,288/60 million respectively.
According to Caixin on June 5th, With the changing situation of the Indian elections, the Indian stock market this week is like riding a roller coaster.
After Modi's overwhelming victory in the exit poll on Monday, the NIFTY 50 index, the benchmark index of the Indian stock market, soared by 3% at one point; on Tuesday, because the preliminary voting results showed that Modi's prospects were not as good as expected, the Indian stock market plummeted by more than 8% at one point, and its market value evaporated by nearly USD 400 billion at the closing. However, on Wednesday, the Indian stock market once again led Asia because a key ally of Modi's political coalition, the "National Democratic Alliance," confirmed that it will support Modi in forming the next government. This largely alleviates the market's concerns.
On Wednesday again, the Indian stock market led Asia because a key ally of Modi's political coalition, "National Democratic Alliance," confirmed that it will support Modi in forming the next government. This largely alleviates the market's concerns.
The NIFTY 50 index in India has experienced ups and downs in the past three days.
Key allies expressed support.
On Wednesday local time, the leader of the Telugu Desam Party (TDP) of Andhra Pradesh, N. Chandrababu Naidu, promised that his party would support the Indian People's Party (hereinafter referred to as "Indian Party") headed by Modi in forming the government.
This statement is very important for the Indian Party, because it only won 240 seats out of 543 seats in the lower house of parliament, failed to win a majority (272 or more) in the parliament, and urgently needed to rely on ally to form a government.
This makes the other two regional parties in the National Democratic Alliance - the Telugu Desam Party and the Janata Dal - extremely critical. In this election, these two parties won 16 and 12 seats respectively in the lower house of parliament. Modi must win the support of the leaders of these two parties and some other small parties in order to form a government smoothly.
It is worth noting that the Telugu Desam Party and the Janata Dal were both allies of the Indian opposition party Congress Party. They both joined Modi's camp only a few months before the election.
Therefore, although these two parties have not shown any signs of turning back, it cannot be ruled out that they may bargain with Modi under the current situation.
Currently, investors are still closely watching the meeting of the National Democratic Alliance in New Delhi tonight. The leaders of the Telugu Desam Party and the Janata Dal have stated that they will attend the meeting tonight to meet Modi.
Indian stock market rebounded on Wednesday.
After Naidu expressed his support for the National Democratic Alliance, the Indian stock market's NIFTY 50 index immediately jumped and broke through the narrow range. Consumer goods stocks rose, and most stocks under the Adani Group rose. As of the time of publication, NIFTY 50 index rose more than 3%.
Consumer goods stocks rose, and most stocks under the Adani Group rose. As of the time of publication, NIFTY 50 index rose more than 3%.
NIFTY 50 index in India on Wednesday.
At the same time, the exchange rate of the Indian rupee against the US dollar rose by 0.1% to INR 83.41 per dollar; Indian bonds hardly changed.
Meanwhile, the "panic index" that measures the 30-day implied volatility, the Indian VIX, plummeted by more than 20% after soaring to its highest level in more than two years on Tuesday.
"We expect the volatility index to return to the level of June 4 in the next few days," wrote strategyists such as Ridham Desai of Morgan Stanley in a report that the ruling alliance in India has passed half the checkpoints and is likely to form the next government.
Mixed emotions of optimism and pessimism.
The current situation is a mix of optimism and pessimism for Indian investors. From an optimistic point of view, with the support of key allies, Modi will have a good chance of continuing his third term in office. However, from a pessimistic point of view, such a weak coalition government may have difficulty implementing the economic reforms Modi has previously claimed.
"Despite political uncertainty, India's strong macroeconomic position and sustained policy focus provide positive long-term prospects for the market," said Evan Metcalf, CEO of Global X ETFs Australia. Although India faces "challenges of coalition politics," the government will continue to focus on infrastructure and manufacturing.
Most Wall Street analysts also believe that the headwinds facing the Indian stock market are unlikely to last too long.
Jefferies Financial Group Inc. analyst Mahesh Nandurkar wrote in a report, "The election outcome is a short-term downgrade event for the market, with the greatest impact on recent winners such as public sector stocks, industry and real estate."
Goldman Sachs strategist Sunil Koul wrote in a report that the Indian stock market will ignore the election's uncertainty as corporate earnings and the Indian economic situation remain unaffected. They said, "We remain optimistic about the Indian stock market and see this weakness as an opportunity to increase holdings."