"There isn't a wave for Modi like it was in 2014 but he is clearly in the fulcrum of all debates," said Gautam Chhaochharia, Managing Director and head of India research at UBS Securities.
The government's scheme to provide direct income transfer to farmers is a wild card for voters in Madhya Pradesh and Uttar Pradesh, but it is uncertain if people will vote for the BJP in the upcoming general elections, according to Gautam Chhaochharia, Managing Director and head of India research at UBS Securities.
In an interview with CNBC-TV18, Chhaochharia shared his views on the outlook for the market with an eye on elections and on the ground reality of various schemes announced by the government after their trip to Uttar Pradesh and after meeting politicians, journalists, policymakers and local people.
"This scheme is definitely a wild card for Modi in Uttar Pradesh and other states," he said, adding that it is uncertain whether farmers will vote for BJP because of the scheme. The other sense they got was that there isn't a wave for Modi like it was in 2014 but he is clearly in the fulcrum of all debates, said Chhaochharia.
From the fiscal perspective, Chhaochharia said there is no fiscal space left to drive sustainable economic activity through capex or infrastructure.
He said the market seems to be anchored towards BJP-led coalition scenario and, that market valuations are not pricing in a non-NDA government. The base case for Nifty is 10,000, the upside is at 11,300-11,400 and downside would be below 10,000, said Chhaochharia.
The house, he said, have been cautious on capex cycle and do not see private capex cycle coming back. Therefore, all the industrial, infrastructure capex, cement names remain underweight. However rural-focused stocks selectively would continue to do well in any political formation, he said. Banks and IT services would do well. It would be a stock specific call, he added.Source: CNBC-TV18Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.