Union home minister Amit Shah has urged not to link the stock market movements directly to the ongoing Lok Sabha elections but acknowledged that “some rumours” may have fuelled the volatility. In an interview with NDTV, the senior BJP leader said that the market would “shoot up” after June 4 when the results of the general elections are scheduled to be announced.
Equity benchmark indices have given up most gains made this year on concerns over the outcome of ongoing national elections and sustained selling by foreign investors. The blue-chip NSE Nifty 50 and S&P BSE Sensex took another plunge of over 1 per cent on Monday morning trading at 21,828.7 points and 71,880.07, respectively. as of 10:45 a.m. IST. For the year, the Nifty’s growth has remained subdued at less than a per cent, while the Sensex has recorded marginal losses.
“The market has nosedived in the past as well. So one should not link it directly to elections. Anyway, some rumours may have fuelled it (the fall). In my opinion, buy before June 4. The market is going to shoot-up,” Amit Shah told NDTV Profit.
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When asked if the post-result market movement would break the past records, Amit Shah, “I can not analyse stock market. But, normally, when a stable government is formed, the market goes up. That’s why I am saying we are going to cross the 400 market, a stable Modi government is coming. So the market will definitely go up.”
Polling for Lok Sabha elections, the world’s largest democratic exercise, started last month, with votes set to be counted for June 4. A relatively lower turnout of voters have drawn attention of poll watchers.
“The volatility in the market is due to concerns over election results and foreign selling,” said Anil Rego, founder and fund manager at Right Horizons, as quoted by Reuters.
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Foreign portfolio investors (FPIs), significant players in the market dynamics, offloaded shares worth over ₹17,000 crore ($2.05 billion) in just seven sessions in May, marking the highest sell-off since January. Foreign investors sold $1 billion in April after buying $4.2 billion in March.
“Markets do not like uncertainty,” said Mohit Khanna, fund manager at Purnartha One Strategy, as quoted Reuters.
“Recent lower voter turnout and not-so-exciting management commentary from several companies like Tata Motors in the ongoing earnings season have added to selling pressure,” Khanna said.
(With inputs from agencies)
