Markets will be shaky if BJP does not form stable govt, says Vijay Kedia

With the election results clearly showing that the ruling BJP party will be unable to secure an absolute majority on its own, markets will remain shaky and lack confidence, says well-known stock market investor Vijay Kedia

With the election results clearly showing that the ruling BJP party will be unable to secure an absolute majority on its own, markets will remain shaky and lack confidence, said well-known stock market investor Vijay Kedia.

“If BJP is unable to form a stable government then the markets will stay shaky and lack confidence because that throws up a situation with a lot of ifs and buts for the market as the alliance partners could end up risking the overall stability,” Kedia said.

Indeed, as the stock market went in a free-fall mode from the word go on Tuesday as the initial trends of the election results started pouring in well before the markets opened for trading.

The 30-share Sensex, which was down more than 6,200 points or 8.15 percent during intra-day trades, settled at 72,079.05, down 4,389.73 points or 5.74 percent. The broader 50-share Nifty ended the day at 21,884.50, down 1,379.40 points or 5.93 percent.

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The sentiment of the market could further be gauged by the fact that as many as 3,349 stocks ended the day in the red as against a mere 488 gainers. Further, nearly 300 stocks touched their respective 52-week lows on Tuesday.

In terms of investment strategy, Kedia believes that the best strategy would be to focus on sectors that are high priority for the new government.

“My strategy will be to focus on the sectors that are high on the radar of the new government. We are in the market to make money and will continue to do so. Just that the strategy will have to be tweaked according to the new political setup,” he says.

Meanwhile, according to the market veteran, the bigger disappointment from a stock market perspective was not the fact that the actual results were not in line with the exit polls but a possible scenario where BJP will not be getting absolute majority on its own.

“It is a clear fact now that the exit poll and the actual results are in completely different direction but the bigger debacle from a market perspective is the fact that BJP could end up in a situation where it does not have absolute majority on its own,” he says.

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At around 5pm, BJP was leading in 243 seats while the Congress was ahead in 98, as per data available on the Election Commission of India website. On an overall basis, the BJP-led NDA was ahead in 295 seats while the INDIA alliance was leading in 232 seats.

This was in sharp contrast to the exit poll predictions, wherein the NDA was expected to win in the range of 320 to 350 seats.