Indian stock markets on Monday, June 3, reached record highs amid news that experts predict the victory of the current Prime Minister of this South Asian country, Narendra Modi, in national elections.
It is worth noting that political stability in all its forms and formats of existence is a factor of beneficial impact on the condition of the economy. The Indian benchmark Sensex index, which tracks 30 large companies, and the broader Nifty 50 index reached record highs, showing growth of more than 3%.
Last weekend, weeks-long elections in India ended. On Saturday, June 1, Narendra Modi, shortly after the polls closed, declared confidence that the residents of the South Asian country voted for the re-election of the current government. It is worth noting that the incumbent Prime Minister of India has been able to achieve significant economic indicators over the past 10 years, which has become a period of active growth for the state. The election results will be announced on Tuesday, June 4. During the previous election process, Narendra Modi’s party won 303 seats in parliament. Currently, analysts predict an even more confident victory for the Prime Minister. These expectations have become a kind of source for spreading optimistic sentiments in the market.
Manish Chowdhury, head of the research unit of the brokerage company StoxBox, says that exit polls indicate a mark of 370 seats for Narendra Modi’s party in the Indian parliament. The expert also noted that against the background of this political news, an increase in the inflow of funds from domestic and foreign investors is expected in the future.
It is worth noting that Indian stocks turned out to be on a growth trajectory last week when data on the high economic growth rates of the South Asian country for the fiscal year ended in March were released. The corresponding figure increased by more than 8% year-on-year. Against this background, India’s status as the fastest-growing major economy in the world has strengthened.
The South Asian country has the potential for further annual economic growth of at least 6%. At the same time, according to the opinion spread in the expert group, efforts should be made in India to ensure that the mentioned indicator reaches 8% or more. This result is a prerequisite condition for the South Asian country to become an economic superpower.
There is a widespread expectation among investors that if Narendra Modi’s party wins a majority in parliament, the government will unleash land and labor reforms. The mentioned reforms are necessary for the next stage of economic growth.
Some observers predict that India’s economic system will become the third largest in the world by 2027. According to preliminary forecasts, the South Asian country will lose ground to the United States and China in this case.
Shares of the Indian conglomerate Adani Group, which supplies electricity, also showed growth on Monday. Securities of Adani Enterprises, the flagship company of the mentioned group, rose by more than 7%. The share price of Adani Power increased by 16%. Last week, the founder of the conglomerate Gautam Adani again became the richest man in Asia, surpassing his compatriot Mukesh Ambani, chairman of Reliance Industries, in terms of the corresponding indicator. Both of these businessmen are supporters of Narendra Modi. The growth of fortunes by Guatami Adani came a year and a half after his group faced an unprecedented crisis related to allegations of fraud by the US company Hindenburg Research.
During Narendra Modi’s tenure as Prime Minister of the South Asian country, local stock markets have shown good results. The value of companies listed on Indian stock exchanges exceeded the $4 trillion mark at the end of last year.
