How will the market perform on election result day? | Ft. @SandeepJainStocks | CA Rachana Ranade
Published: 2024-05-31
Status:
Available
|
Analyzed
Published: 2024-05-31
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
If the BJP (NDA) wins fewer than 300 seats, the Indian market could experience a significant correction.
"I don't feel that you know it will come below 300 and if it happens then you know that can really be you know a very big blow to the market and markets may correct."
Pending
It is advisable to reduce market exposure before the Indian election results.
"I feel that you know we should be a bit lighter while going into the elections."
Pending
Even if the NDA wins 340-350+ seats, leading to a market rise, there's a high probability of profit booking ('sell on news') occurring shortly after.
"In any scenario if BJP comes up with 340-350+, markets might go up NDA sorry not BJP NDA markets will go up but there will be some chances of correction also because at that moment you know market participants might do some profit booking because it's like you know whenever uh you know uh you buy on rumors and sell on news so typically that will happen."
Pending
The Indian market's direction after the election results will also be influenced by the full budget, expected in July.
"And then the markets will look up to the budget the full-fledged budget which will come in the month of perhaps in the month of July it happens after the one month of you know the coming in or swearing in ceremony of the government."
Pending
The speaker intended to reveal four fundamentally strong stocks relevant to the current market scenario at the end of the session (these specific stock recommendations were not provided in the transcript).
"so uh like like Sandeepji said that he is also going to share a lot of insights but towards the end of the session he's going to talk about four fundamentally strong stocks which he feels that will be most relevant in the current market scenario"
Pending
The speaker intended to reveal four fundamentally strong stocks relevant to the current market scenario at the end of the session (these specific stock recommendations were not provided in the transcript).
"so uh like like Sandeepji said that he is also going to share a lot of insights but towards the end of the session he's going to talk about four fundamentally strong stocks which he feels that will be most relevant in the current market scenario"
Pending
The full interview, containing more detailed insights and potentially stock recommendations, is available on the 'Invest in India' community.
"The whole interview is available on my invest in India community."
Pending
The speaker intended to reveal four fundamentally strong stocks relevant to the current market scenario at the end of the session (these specific stock recommendations were not provided in the transcript).
"so uh like like Sandeepji said that he is also going to share a lot of insights but towards the end of the session he's going to talk about four fundamentally strong stocks which he feels that will be most relevant in the current market scenario"
Pending
The speaker intended to reveal four fundamentally strong stocks relevant to the current market scenario at the end of the session (these specific stock recommendations were not provided in the transcript).
"so uh like like Sandeepji said that he is also going to share a lot of insights but towards the end of the session he's going to talk about four fundamentally strong stocks which he feels that will be most relevant in the current market scenario"
Pending
The speaker intended to reveal four fundamentally strong stocks relevant to the current market scenario at the end of the session (these specific stock recommendations were not provided in the transcript).
"so uh like like Sandeepji said that he is also going to share a lot of insights but towards the end of the session he's going to talk about four fundamentally strong stocks which he feels that will be most relevant in the current market scenario"
Pending
The market is expected to be more comfortable if the NDA crosses 340-350 seats.
"I feel that you know markets will be more comfortable able you know if BJP crosses NDA crosses 340-350"
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The market has already priced in the possibility of the NDA achieving 330-340 seats.
"markets have already discounted 330-340"
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If the NDA wins fewer than 300 seats, it could be a significant negative event for the market, potentially leading to a correction.
"I don't feel that you know it will come below 300 and if it happens then you know that can really be you know a very big blow to the market and markets may correct"
Pending
If the NDA wins fewer than 272 seats (below majority), the market will definitely correct.
"and if it is below 272 it will certainly correct"
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A market correction is anticipated across all possible election result scenarios.
"in all the scenarios there will be a correction"
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The upcoming week and the end of June (Modi 2.0's last settlement) are expected to be eventful for the market.
"so every day is eventful next week so we have you know 1st of June you know 30th of June it is the settlement Modi 2.0's last settlement"
Pending
The increase in volatility (VIX) is seen as positive as it prevents complacency and has led people to reduce their market positions.
"and it's good also at times you know because uh that kind of complacency should not be there so it has actually increased the volatility also and people have started reducing their positions"
Pending
Clients have been advised to hold 30-40% cash, particularly important for traders.
"we have actually recommended our clients in whatever scenario I think one should be on cash 30 to 40% for trader it is very important to stay on cash"
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Investors with profits are advised to book some gains and hold cash.
"for investors even if you know you have some good profits and some good stocks you at least can book some profits and sit on cash"
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The most negative election scenario (BJP losing) is not considered likely, but some reduction in seats from Rajasthan (4-5 seats) is anticipated.
"I feel that you know uh you don't have to be worried because somehow that negative scenario the fourth option which Rachanaji herself denied of talking about so that scenario is not there but yes there are some numbers getting reduced um from the state of Rajasthan I can you know feel that you know last time it was a complete uh 25 seats but this time you know BJP might lose 4-5 seats here and there"
Pending
The election outcome might not be as straightforward as initially perceived, and has generated some market excitement reflected in rising VIX.
"so things are not as rosy as it looked to be and you know people treated it as a non-event but it doesn't look like to be a non-event somehow there has been some excitement created and we could see the Wicks going up"
Pending
It's prudent to reduce exposure before the elections, as the market is expected to be volatile leading up to the settlement date at the end of June.
"so I feel that you know we should be a bit lighter while going into the elections so uh every day is eventful next week so we have you know 1st of June you know 30th of June it is the settlement"
Pending
Following the December state election wins, the market rallied, anticipating a Modi victory with 350-400 seats, which kept the VIX low.
"after the elections in December after they have won three states with tremendous victory so you know that was one point you know where the markets actually started going up and the discounted that you know Modiji is going to come up with you know 350 to 400 seats so that was the reason vix was not going up"
Pending
As people reduce positions, clients have been advised to hold 30-40% cash (traders) or book profits and sit on cash (investors).
"so people have started reducing their positions and we have actually recommended our clients in whatever scenario I think one should be on cash 30 to 40% for trader it is very important to stay on cash for investors even if you know you have some good profits and some good stocks you at least can book some profits and sit on cash"
Pending
Corrections are expected in all election scenarios, and the market will subsequently focus on the full budget to be presented in July after the new government is sworn in.
"in all the scenarios there will be a correction so I feel that you know and then the markets will look up to the budget the full-fledged budget which will come in the month of perhaps in the month of July it happens after the one month of you know the coming in or swearing in ceremony of the government"
Pending
Even with a strong NDA victory (400+ seats), it's unlikely all stocks will skyrocket; there won't be a situation where every stock becomes a guaranteed 20%+ gainer.
"so uh I feel that you know it will be safer and it does not mean that even if Modiji come up with or NDA come up with 400+ seats it is not going to happen that you know there are no stocks which you can buy the sky is the limit and all the stocks are going up and up 20% it will not happen it will never happen"
Pending
Even with a significant majority, profit booking will occur, creating opportunities to invest saved cash (previously recommended 30%).
"so even if they come up with the best majority or the most you know coveted numbers even at that time also I feel that there will be some profit booking not in that scenario but uh you know there will be some opportunities which you can where you can put in your money which you have saved that 30% which we have saved you know that you can save that money and then enter at those point of time"
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Reducing market exposure ('going lighter') is a beneficial strategy regardless of the election outcome.
"so going lighter will help you in both the scenarios"
Pending
Historically, post-election periods in 2014 and 2019 saw profit booking, with the market correcting by 7-8% over three months in 2019.
"be it 2019 or be it 2014 in both scenarios post elections the markets did see some profit booking and I remember 2019 mein for the next three months almost Market corrected in totality 7 to 8 %"
Pending
While the exact percentage is uncertain, some degree of profit booking is expected after the elections.
"see whether it'll exactly correct 7 to 8% or not uh right now let's not comment on that but there will be some sort of profit booking is what even you agree"
Pending
For investors, holding 10-20% cash is recommended, with the exact amount depending on their portfolio composition.
"Investor I think 10 to 20% will be good and then it depends on that portfolio also"
Pending
Sectors like IT, Healthcare, Telecom, consumer-driven industries, financial services (excluding PSU banks), and technology/innovation are considered election-proof and likely to offer alpha returns, especially in mid and small-cap segments.
"so these are some sectors and technology and Innovation these are the sectors so which one can really look at and because you know when you buy the midcaps and small caps in these sectors they will certainly give an alpha"
Pending
Measures like GST and income tax reforms under Modi's government have initiated a significant structural change in India's economy, with a positive business landscape expected to continue for the next 5-10 years.
"it's a very very big structural and a paradigm shift in the whole Indian ecosystem it's the formalization of Indian economy GST ,income taxes all these measures in Modi 2.0 Modi 2.1 uh sorry Modi 2 and 1 they have changed the whole you know scenario business landscape of India and that is going to happen for next 5 to 10 years also again"
Pending
The current environment for small and mid-cap companies is different from the past, with improved transparency, higher compliance, and better governance standards, leading to more reliable financial reporting.
"so now the things are different it's not like the past now if the numbers are good they are not you know typically dressed up or window dressed like the past so now the compliance standards everything is going up so governance standards are going up things are very good now in the Indian economy"
Pending
Profit growth without corresponding sales growth indicates that companies are more transparently reporting profits and paying taxes, a positive sign for the economy.
"we have seen sales not growing up but profits growing up so that shows that you know people are actually trying to show their actual profits and giving taxes also"
Pending
Certain sectors are identified as 'election-proof' because their performance is not significantly tied to election outcomes.
"so election-proof is actually there are some sectors you know which are not very concerned with the results in the elections"
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Given the exceptionally rapid gains in defense stocks (e.g., GRSC from 913 to 1450), it is advisable to book profits due to the speed of the returns.
"so this is the kind of jump it was in you know Defense stocks so I feel that you know if you have these kind of profits at least it is wiser to book profits because it is too fast too fast a return"
Pending
Key election-proof sectors include IT, Healthcare, FMCG, private sector banks, Telecom, consumer-driven industries, and technology & innovation.
"so election-proof is actually there are some sectors you know like IT doesn't get affected Healthcare Defense uh sorry uh Healthcare then uh something like uh fmcg yes yeah actually I came up with those uh names but uh I think I'm not able to find the the paper but then Financial Services yes not the banks PSU Banks but private sector Banks then Healthcare Telecom is one sector then consumer driven Industries so these are some sectors and technology and Innovation these are the sectors"
Pending
Investing in mid and small-cap stocks within these election-proof sectors is expected to generate alpha returns.
"so which one can really look at and because you know when you buy the midcaps and small caps in these sectors they will certainly give an alpha"
Pending
While not as explosive as defense stocks, election-proof sectors will also see gains due to their consolidated nature.
"and it's not that they will not go up because they're election-proof and they will not give you the right kind of returns which you are expecting as if you know the Defense stocks and all these stocks are going to give they will also go up because they are all Consolidated sectors"
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A strategy focused on lower risk in consolidated sectors offers lower potential rewards but prioritizes capital preservation and peace of mind.
"downside risk is very low and return and reward is always a function of risk so the lesser risk you take maybe the reward is lesser but it is always important not to lose money in markets and not to lose your sleep also at the same time"
Pending
Global market cues, which are currently decoupled, are expected to become re-coupled with the Indian market in the days following the elections.
"and the next few days after the elections all these markets will again get coupled with the Indian markets now you know the global cues are not coupled so uh we will get coupled again recoupled"
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Investment ideas have been identified based on strong quarterly results, favorable charts, and solid fundamentals.
"so I've been able to get some good ideas where the quarterly results are good where the charts are good and the fundamentals are very good"
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Favorable and confirmed investment opportunities are anticipated to emerge after the election results.
"you will get very good and confirmed opportunities after the elections"
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The speaker confirms they have addressed the question about 'election-proof' investment themes.
"so I think uh so have I answered my question or what was the question ? the question was about any bullet proof sorry bullet proof election-proof yeah"
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While the worst-case election scenario is unlikely, a slight reduction in BJP's seat count in Rajasthan (4-5 seats) is predicted, suggesting things might not be as smooth as initially anticipated.
"so the fourth option which Rachanaji herself denied of talking about so that scenario is not there but yes there are some numbers getting reduced um from the state of Rajasthan I can you know feel that you know last time it was a complete uh 25 seats but this time you know BJP might lose 4-5 seats here and there"
Pending
The market saw a significant jump around May 20th due to favorable polling trends (0.5% higher than last time), new highs, and a large dividend from the RBI to the government.
"so this time May 20th was a very favorable day because after 2-3 days you know it was exactly 250 on Thursday when we you know touch the new highs and that day something like you know um 0.5% was the percentage higher than the last time's polling percentage so this was the number and you know markets really did well and then the RBI doled out a huge dividend to the government so all these things happened and that's why you know uh we could see a great uh jump in the markets"
Pending
Investors should consider holding 10-20% cash, with flexibility based on their existing portfolio holdings (e.g., defense, railway stocks).
"Investor I think 10 to 20% will be good and then it depends on that portfolio also because you know if uh they are sitting on some good Defense stocks Railway stocks they might go up I I'm not saying I'm not denying but they can switch to some safer sectors also"
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The business landscape in India has been fundamentally transformed by measures taken during Modi's tenures, with this positive impact expected to persist for the next 5-10 years.
"Modi 2.0 Modi 2.1 uh sorry Modi 2 and 1 they have changed the whole you know scenario business landscape of India and that is going to happen for next 5 to 10 years also again"
Pending
Not all stocks will rally, as upcoming quarterly results (due by June 15th) and the budget will also influence market performance.
"so all the 800 stocks will not go up because then there are quarterly results also yet pending because the last quarter result the March quarter results generally they have to come up in one and a half months but this quarter result is allowed till June 15th"
Pending
Holding cash and booking some profits before the elections is a prudent strategy that benefits investors regardless of the outcome.
"so try to sit on cash try to book some profits before going into the elections going lighter will help you in both the scenarios"
Pending
Market corrections due to profit booking have occurred in the past post-election periods (e.g., 7-8% correction in 2019 over three months).
"in both scenarios the markets did see some profit booking and I remember 2019 mein for the next three months almost Market corrected in totality 7 to 8 %"
Pending
Upcoming quarterly results (due by June 15th) will also be a factor influencing stock performance, meaning not all stocks will see gains.
"so all the 800 stocks will not go up because then there are quarterly results also yet pending because the last quarter result the March quarter results generally they have to come up in one and a half months but this quarter result is allowed till June 15th"
Pending
A market correction is expected irrespective of the election outcome.
"In all the scenarios there will be a correction"
Pending
It's crucial to avoid significant losses and maintain peace of mind by not over-investing before the election results.
"so it is always important not to lose money in markets and not to lose your sleep also at the same time because if you go heavier into the elections with the whole of your portfolio it might happen that you will lose your sleep"
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Markets are expected to be more comfortable if NDA crosses 340-350 seats.
"I feel that you know, it will be uh markets will be more comfortable able you know if BJP crosses NDA crosses 340-350"
Pending
The market has already priced in an NDA seat count of 330-340.
"markets have already discounted 330-340"
Pending
If NDA seat count falls below 300, it could significantly impact the market, leading to a correction.
"I don't feel that you know it will come below 300 and if it happens then you know that can really be you know a very big blow to the market and markets may correct"
Pending
A market correction is anticipated regardless of the election outcome.
"In all the scenarios there will be a correction"
Pending
Historically, markets have experienced profit booking post-elections, with a notable 7-8% correction in 2019 over three months.
"post elections the markets did see some profit booking and I remember 2019 mein for the next three months almost Market corrected in totality 7 to 8 %"
Pending
Profit booking is expected to occur in the market after the elections.
"there will be some sort of profit booking is what even you agree"
Pending
IT, Healthcare, and FMCG sectors are considered relatively unaffected by election results.
"some sectors you know like IT doesn't get affected Healthcare Defense uh sorry uh Healthcare then uh something like uh fmcg"
Pending
Private sector banks, Healthcare, Telecom, consumer-driven industries, technology, and innovation are identified as election-proof sectors.
"Financial Services yes not the banks PSU Banks but private sector Banks then Healthcare Telecom is one sector then consumer driven Industries so these are some sectors and technology and Innovation these are the sectors"
Pending
The Indian economy is undergoing a significant structural shift due to formalization measures like GST and income tax, which are expected to positively impact the business landscape for the next 5-10 years.
"it's a very very big structural and a paradigm shift in the whole Indian ecosystem it's the formalization of Indian economy GST ,income taxes all these measures in Modi 2.0 Modi 2.1 uh sorry Modi 2 and 1 they have changed the whole you know scenario business landscape of India and that is going to happen for next 5 to 10 years also"
Pending
Increased formalization, governance, and compliance standards in India mean that company numbers are more reliable and less prone to window dressing compared to the past, making midcap and smallcap investments potentially safer.
"so much of formalization so much of governance so much of compliance and as you know Rachana was actually talking to me Rachana, how come you come up with these kind of ideas you know the small cap midcap micro cap aren't you afraid of you know these companies no now the things are different it's not like the past now if the numbers are good they are not you know typically dressed up or window dressed like the past so now the compliance standards everything is going up so governance standards are going up"
Pending