In a report issued by Morgan Stanley, they have said that if the current government was to lose elections in 2024, stock prices may fall in the range of 5% to -40%.
It has said that in the run up to General Elections the indices may rise by 10%. If the government gets re-elected, it may rise a further 5%.
If on the other hand Modi Sarkar was to fall or fail to form the next government, then indices may fall by as much as 40%.
This is an alarming prediction for anyone who deals in the stock markets, especially those who are short term investors. Morgan Stanley pointed out that in 2004 when the government fell, the indices went down by 17% in one single day.
It is evident from what has transpired in the last nine years of Modi Sarkar that a few business houses have managed to corner most of the wealth and have been in the favored list. Gautam Adani’s rise in particular has been meteoric. There is wide acknowledgment that Adani group is a close favorite of Modi in his personal capacity and there is a symbiotic relationship between the two. Recent reports of share price manipulation and rise in valuation in Adani group stocks have met with stoic silence from the government. If Modi Sarkar was to fall, Adani group which has a weight age of 17% in Sensex, itself has the capacity to pull the index down.
Recent panic seen in BJP ranks and its getting rattled by a united opposition alliance INDIA indicates that anything is possible in 2024 general elections.
Those who trade the markets should thus remain cautious. Sensex may fall to 41,000 level after the elections.
