Modi 3.0! Signs of Modi’s strong comeback, which stocks should investors focus on

Exit polls predict Modi 3.0 :NDA government is expected to be formed once again in the country under the leadership of Narendra Modi. In the exit polls released after the voting on June 1, most agencies have shown BJP getting majority on its own. Its effect was also seen in the stock market today, when the Sensex and Nifty reached their record high as soon as the market opened. Sensex rose by more than 2600 points while Nifty crossed 23300. Brokerage houses are also positive for the Indian markets after the exit polls.

Brokerage says that the conditions are positive for the Indian markets. There was uncertainty about the elections in the recent past, but after the exit polls, there is a lot of clarity about the return of the Modi government. Most of the 12 exit polls are indicating a strong return of the Modi government (Narendra Modi 3.0). The return of the Modi government with a huge majority will give strong support to the market. After the arrival of the Modi government, the economy and the capital market will get strengthened, this will give stability and continuity in policy making.

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Stability and continuity in policy-making

According to brokerage house Motilal Oswal, if a single party majority government comes into power, the economy (Indian Economy) and the capital market provide stability and continuity in policy-making with the government. Due to which it is expected that the government will continue to pursue its economic agenda. Equity markets recently showed some concern and nervousness about political uncertainty, resulting in increased volatility in April and May ’24. According to the brokerage, markets will breathe a sigh of relief after seeing clarity in the exit polls and fundamentals / business will return to normal. At present, the political stability and continuity in policy-making from the comeback of the Modi government will act as icing on the cake and will keep India the apple of everyone’s eye.

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Strong macros domestically

Fundamentally, India is looking at its own mini-Goldilocks moment with improving macros (GDP growth of 8.2% in FY24, compared with 7% growth in FY23, inflation at 5%, both current account and fiscal deficit within tolerance bands, stable currency, etc.), solid corporate earnings (Nifty ended FY24 with 25% earnings growth and FY25/26 earnings are likely to post 14-15% CAGR), focus on manufacturing, capex and infrastructure creation.

Which sectors and stocks are positive?

Brokerage house Motilal Oswal says that the important thing is that none of the 12 exit polls (Exit Poll 2024) analyzed are predicting defeat for Narendra Modi. In fact, all have predicted victory with a huge majority. Our model portfolio is aligned with the major domestic cyclical themes amid the consistent backdrop of earnings growth. The brokerage has given overweight ratings on financials, consumption, industrials and real estate. Industrials, consumer discretionary, real estate and PSU banks have been described as favorite themes.

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Top Largecap Ideas

ICICI Bank, SBI, L&T, Coal India, M&M, Adani Ports, ABB, HPCL and Hindalco

Top Midcap Ideas

Indian Hotels, Godrej Properties, Global Health, KEI Industries, PNB Housing, Cello World and Kirloskar Oil