Maharashtra Elections 2024: What Lies Ahead for the Indian Stock Market?
As Maharashtra heads to the polls for its 2024 Assembly elections, the Indian stock market stands at a crucial juncture. While state elections have historically had a minimal long-term impact on the stock market, the key state of Maharashtra is likely to influence market sentiment in the short term.
Maharashtra, being one of India’s most industrialized regions, holds significant weight in the country’s economic landscape. The state contributes 13–14% of India’s GDP, making it the largest contributor among states. It is also home to 19% of India’s recognized startups and consistently ranks among the top states in terms of Foreign Direct Investment (FDI). Given these factors, the Maharashtra election results are expected to be closely watched by investors and market analysts alike.
According to Nikhil Ranka of Nuvama Asset Management, much of the negative sentiment surrounding the elections has already been priced into the equity market. Ranka believes that the elections are unlikely to have a long-term impact on the market and that any short-term market volatility will likely be brief. He also noted that the market is approaching the election results with caution, but a favorable outcome could lead to a resumption of upward momentum from the following day.
On the other hand, Vishnu Kant Upadhyay of Master Capital Services suggested that the Maharashtra elections could have a significant impact on the stock market due to the state's prominent role in the nation’s economic activities. A business-friendly government with a clear mandate could boost investor confidence, potentially fueling market growth and attracting more investments. Upadhyay highlighted that investors will be keeping an eye on any policy changes after the formation of a new government that could impact business operations in the state.
Global brokerage firm Macquarie emphasized Maharashtra’s importance to the National Democratic Alliance (NDA), particularly in light of the "unfavorable outcome" of the recent Lok Sabha elections. The brokerage noted several key reasons why both the country and investors will be watching the Maharashtra election results closely:
- Maharashtra has 48 Lok Sabha seats, the second-largest in India.
- The state contributes 13-14% of India’s GDP, the largest share among all states.
- Its per capita income is 30% higher than the national average.
- Maharashtra accounts for 16% of India’s total exports.
- The state is a leader in FDI inflows and has the highest number of startups in India.
In the lead-up to the Maharashtra elections, the Indian stock market had shown signs of recovery. The Nifty50 broke its seven-day losing streak, gaining 65 points to close at 23,519. Similarly, the Sensex also ended the day in the green but saw a decline of nearly 900 points from its intraday highs, which were impacted by global uncertainties, including a Ukrainian strike in Russia.
As the results of the Maharashtra Assembly elections unfold, investors are expected to closely monitor the potential policy shifts and their effects on the state’s industrial and business environment. With
Maharashtra being such a key player in India’s economy, the outcome of these elections could have implications for both the stock market and the overall economic outlook for the nation.
Reference from:-https://www.cnbctv18.com/market/maharashtra-elections-2024-what-lies-ahead-for-the-indian-stock-market-19512106.htm