Whichever party comes to power, the markets will keep on rising: Shankar Sharma

“India has a lot of growth path which is clear in my mind. From our low rate of per capita GDP, we need to be there at $10,000”, Shankar Sharma said

Indian markets will continue to rise irrespective of any party that comes to power, said veteran investor Shankar Sharma. “Whichever party comes, markets won’t fall because they have seen what other parties have delivered. So let’s not waste time looking at which party comes to power. I’m bullish on India,” Sharma said.

Chris Wood, global head of equity strategy at Jefferies recently remarked that Indian markets would fall 25 percent if the current BJP government doesn’t come back to power in 2024. In 2004, the Indian markets fell by 20 percent in two days after the BJP government lost the elections.

Sharma pointed out that the India growth story is not a recent phenomenon and the narrative was going around back in 2007 also. “In 2007, India was the toast of Davos. They said it was India’s decade and India’s century and 15 years on, it's the same story. It’s due to recency bias that we think India has suddenly become the toast of the world."

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"This was going around during the time when the BRICS was formed. Within 5 years, the big people realised only India and China are viable part of the BRICS formation. Now China has fallen off because of its own problems. India is the only country standing,” Sharma said.

“India has a lot of growth path which is clear in my mind. From our low rate of per capita GDP, we need to be there at $10,000”, he added.

According to data from the International Monetary Fund, India’s per capita GDP reached $2610 in 2023.

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Sharma said if a new government comes and the market reacts, it can be used as an opportunity to buy stocks at a lower price.

“There can be temporary speed bumps if the BJP doesn’t come, if the Congress comes, maybe we get a 10 percent down day. I don’t think that’s going to happen. If the market falls, it will be a buying opportunity like how 2004 was for that decade.” Sharma added.

According to a report from Morgan Stanley, the 2024 elections could yield different market outcomes based on the results. If the current government secures a clear majority, the market may gain 0 to 5 percent in the three months following the election.

In the event of a coalition government formation in the absence of any party winning a clear majority, the market could decline by 5 to 25 percent.

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