India is undergoing elections and the stock markets Sensex and Nifty remain on a slippery slope as results are set to be announced on June 4, 2024. Narendra Modi wants to win a third term and needs his party, the BJP, to cross the 272 majority mark. to form the government. While many political experts predict he would comfortably surpass the 300-seat mark, others argue he may fall short.
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Therefore, the Indian stock market remains jittery as vote counting goes live next week, which will determine whether Modi will remain the country's prime minister. However, the chairman of Rockefeller International Ruchir Sharma opined that if the BJP fails to reach majority numbers, the Indian stock market could crash by 15-20%.
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A sharp 20% correction in the Indian stock market if Modi fails to win a majority seat
There is immense pressure on the Indian stock market in the wake of the elections and the counting date that will determine Modi's fate. Ruchir said if the BJP wins 250 seats falling short of the majority, Sensex and Nifty could crash by 15-20%.
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The Rockefeller chairman also said foreign investors are staying away from the Indian stock market due to election turbulence. “It is also the reason why foreign investors are reluctant to enter. The local environment for foreign direct investment still needs significant improvement. We are attracting foreign direct investment as a share of the economy with a share of more than 1 percent of GDP.” he observed.
Modi is being praised across the country for taking India to a $3.87 trillion economy that is outperforming Britain. However, the poorer part of the country is not happy as wages do not reflect Indian growth. Several sections have complained that the increase in GDP is only on paper, but living conditions are still worse. In conclusion, the direction of the Indian stock market will be determined on the day of the election results.