Prime Minister Narendra Modi’s prediction of a stock market after Lok Sabha elections has come true as Sensex rallied over 5,000 points since June 4. In 9 trading sessions, Sensex and Nifty hit all-time record highs. During the same time, investor wealth jumped by ₹42.4 lakh crore to ₹437.24 lakh crore.
While campaigning for the Lok Sabha elections, PM Modi said that the market will hit record highs after elections. He told NDTV while hinting that the market will hit fresh record highs, “You will see that within one week after June 4, the day election results are to be declared, market participants will get tired.”
Home Minister Amit Shah also said that investors must buy before June 4 as the market will shoot up.
Following the elections, statements by PM Modi and Amit Shah became a political issue as Congress leader Rahul Gandhi alleged that the June 4 crash in which investors lost ₹31 lakh crore in notional wealth was owing to manipulation in the markets. Congress demanded a probe by a joint parliamentary committee (JPC) as the Sensex hit record high on June 3 after exit polls but fell the next day.
Meanwhile, Morgan Stanley predicted that the Sensex will hit 82,000 in the next 12 months. It said, “The main benefit to the market of the NDA’s re-election is policy predictability, which will influence how growth and equity returns pan out in the coming five years. We believe the government is likely to continue focusing on macro stability (i.e., inflation hawkishness) to inform policy.”