- The Indian stock market is experiencing a surge in volatility, with the benchmark Nifty 50 expected to correct by another 2-3 per cent in the coming weeks.
- This volatility is driven by uncertainty surrounding the outcome of the Lok Sabha election on June 4th.
- Despite this, market experts remain optimistic about the medium-to-long-term prospects of the Indian stock market.
Amidst election uncertainty, the Indian stock market faces volatility, with the Nifty 50 expected to correct by 2-3%. However, experts remain optimistic about the market’s long-term prospects.
Indian Stock Market Faces Volatility
The recent surge in volatility in the Indian stock market is expected to persist for the next few weeks. The benchmark Nifty 50 may correct for another 2-3 per cent in the coming weeks, driven by the prevailing uncertainty surrounding the outcome of the Lok Sabha election on June 4th, according to experts. The market sentiment may continue to be delicate owing to various factors, including elevated valuations, lacklustre Q4 performance, evolving geopolitical landscapes, and the absence of significant positive catalysts.
Medium-to-Long-Term Market Prospects
Despite the current volatility, market experts remain upbeat about the medium-to-long-term prospects of the Indian stock market. They believe that the election outcome would only cause short-lived volatility and that investors should buy quality stocks during the crash for the long term. Experts express anticipation of sustained high volatility leading up to the election outcome. However, they also believe that the Sensex and the Nifty 50 may not see a major crash beyond 2-3 per cent in the next three weeks.
Election Jitters Not the Only Factor
While nervousness ahead of the Lok Sabha election outcome is one of the most significant reasons behind the current market volatility, experts say several other factors are at play. These include rich market valuation, the geopolitical situation, sticky inflation and the absence of fresh, positive triggers, which have kept the market sentiment low.
Market Hopes for a BJP Win
Experts believe the market is still expecting the return of the BJP-led NDA to power. A negative surprise can upset the market. However, the market will gradually shift focus to macroeconomic prints, inflation, rate cut dynamics and geopolitical developments.
Conclusion
While the Indian stock market faces a period of volatility due to the upcoming Lok Sabha election, experts remain optimistic about the market’s long-term prospects. Despite the expected short-term correction, the market is anticipated to recover and continue its growth trajectory.
