Global brokerage firm UBS on Monday warned investors of a sharp reaction in the stock market if the ruling Bharatiya Janata Party loses power in the ongoing Lok Sabha elections and said in a worst-case scenario, stock valuations may test pre-NDA levels. Could.
UBS outlined four scenarios for investors following the results on June 4. In the first scenario, according to the arbitrator, if the BJP retains its single-party majority, “the market will remain confident about the continuity of the policy, but the possibility of further reforms including disinvestment, land” bill and Uniform Civil Code may depend on it. . Number of seats won. Overall, financial market sentiment is likely to remain positive.
If the BJP fails to retain its single majority and form a government with the NDA, UBS said markets may be a little less confident as “there may be pressure from other political alliances, but overall macro stability may prevail.” ” Mixed effects on financial markets.
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UBS said there could be more market uncertainty in the event of a hung parliament and “a less decisive government which could delay implementing reforms.” We anticipate a risk of policy paralysis, which could have a negative impact on financial markets.
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But there could be significant uncertainty in the market if there is a change in government, with UBS saying it could see “a high risk of a reversal of some of the reforms implemented by the NDA. There could be a sharp, shock wave in financial markets.” There is a possibility.” Reaction due to uncertainty. With the change of government.”
