The Indian Express (Delhi Edition)
‘Govt’s approach on infra has gained investors interest’
IMPROVEMENT IN macro variables and the government’s focused approach on infrastructure development, while being fiscally prudent, has gained investors interest in recent years, according to a report by JM Financial Securities released on Tuesday.
Hence the market is concerned with the likelihood of regime change and its impact on macro-economic equilibrium maintained by the policies of the incumbent government.
Unlike the narrative on inflation, the Reserve Bank of India’s (RBI) effective monetary policy led to sharp moderation in core inflation to 3.4 per cent. But the growth in non-agri wages not keeping up with inflation has been one of the reasons for the rural distress, the report said.
Commenting on the impending results of the ongoing Lok Sabha elections, the JM Financial Securities report said that the Bharatiya Janata Party (BJP) is expected to comfortably retain its majority and is likely to win 299 seats, four seats lower than its 2019 general election tally.
According to the brokerage, policy continuity will ensure opportunities in defence and capital goods space while valuation comfort is available in private banks and consumers. Large caps are expected to outperform small and midcaps (SMIDS) in the post-election cycle, it said.
“Based on our assessment of major states on pan India basis, we see a net incremental loss of around 4 seats to 299 for BJP in our base case while our bear and bull case seat tally is in a narrow range of 290 to 310,” the report said. In 2019 Lok Sabha elections, the BJP won 303 seats.