As the National Democratic Alliance (NDA) eyes to secure over 400 seats in the 2024 Lok Sabha elections, a report released on Saturday pointed that the ruling alliance has only a little room for gains more than it secured on 2019.
The Bernstein Societe General Group’s latest India Strategy report said the NDA secured an overwhelming majority in key states in 2019 elections, leaving little room for further gains.
The report delves into the intricacies of the political landscape, analysing various factors that could influence market sentiments and economic policies in the coming years.
The Bharatiya Janata Party, which has almost 99 per cent of seats in eight crucial states – Gujarat, Rajasthan, Bihar, Uttar Pradesh, Madhya Pradesh, Maharashtra, Chhattisgarh, and Haryana – is likely to face more challenge than anticipated to expand its stronghold to reach the coveted “Plan 400” target.
The NDA requires an additional 50 seats to surpass its previous election’s tally, which is why the Bernstein report – How?
While the southern belt, particularly Andhra Pradesh, Telangana, and Odisha, presents an opportunity for growth, the report emphasizes that securing gains in these regions will not be a cakewalk.
Market projections
According to the Bernstein report, despite the optimistic projections, the markets may not see a significant increase in seats from low-penetration states, offsetting potential losses in other regions.
While a short-term positive reaction is expected if the election results align with current estimates, a profit-booking phase post-elections is anticipated.
The report has predicted a modest downside in the market as the macroeconomic fundamentals remain strong.
It also said that the market expectations have reached a peak as the opinion polls have projected a resounding victory for the ruling coalition.
However, the report reflects ambiguity on the opinion polls being too optimistic and highlighted potential challenges in achieving the projected gains.
A scenario where the ruling party secures around 300 seats (approximately 350 for NDA) could trigger a correction in the markets, which have factored in a number closer to 400.
While continuity of power is expected, a below-consensus result may lead to a market reaction, signaling the end of the current frenzy.
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Published: 20 Apr 2024, 08:43 PM IST