General Elections 2024: Potential Impacts on Equity, Forex, and Bond Markets with Various Poll Outcomes

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  <li>With the elections almost over and the results less than 10 days away, global brokerage house Nomura believes that the uncertainty regarding the poll outcome will continue until 4th June, when it will be announced, although exit polls on 1st June should provide some clarity on the likely results.</li>
  <li>The markets have recovered considerably in the previous week turning positive for the month of May after a very volatile first half. Benchmark Nifty is now up 1.5 percent in May so far, which was around 3 percent lower in mid-May.</li>
  <li>"All opinion polls conducted over the past one year have consistently suggested the BJP-led NDA is likely to return to power, winning over 272 seats," forecasted Nomura.</li>
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<p><strong>Discover how the upcoming election results could impact the Indian stock market, including potential scenarios and market reactions.</strong></p>
<h2><strong>Market Recovery Amid Election Uncertainty</strong></h2>
<p>In a recent report, Nomura presented its baseline and predicted how markets will react under various scenarios. The markets have shown resilience, recovering significantly in the previous week and turning positive for May after a volatile start. Benchmark Nifty is now up 1.5 percent in May, a stark contrast to its 3 percent decline in mid-May.</p>
<h3><strong>Potential Election Outcomes and Market Reactions</strong></h3>
<p>Nomura's analysis suggests that an outright BJP victory would be the most favorable outcome for the markets, potentially leading to a rally in domestic sectors such as financials, consumer discretionary, industrials, and PSUs. Conversely, an NDA victory might result in a sell-off in highly valued domestic-oriented sectors, while banking, consumption, and pharmaceuticals could outperform. An I.N.D.I.A victory is expected to trigger a broad sell-off across most domestic-oriented sectors, with consumer staples, IT services, and pharmaceuticals likely to outperform.</p>
<h3><strong>Conclusion</strong></h3>
<p>As the election results approach, investors should brace for potential market volatility. Nomura's insights provide a roadmap for understanding how different election outcomes could impact various sectors and the overall market sentiment. Regardless of the outcome, the focus will eventually shift back to macroeconomic factors and long-term growth prospects.</p>