The results of the assembly elections in five states have come. BJP has won in four states. Especially victory in big states like UP means a lot to BJP. The BJP has got a two-thirds majority in the state. In Uttarakhand too, she is going to form the government with more seats than expected. The stock markets welcomed the election results on Thursday. Markets closed with good gains. Market sentiment is positive on Friday as well. The question is, what does this victory mean for the stock markets?
Government’s confidence increased
Experts say that the election results have increased the confidence of the government. Therefore, it is expected that the government will be seen moving on the path of reforms. Foreign brokerage firm Jefferies has said that the government will go ahead with the process of privatization in the next few months. The government has sold Air India. After many efforts, the government got success in this. He has made plans for privatization of some more companies.
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The focus will remain on infrastructure
It is believed that after the sale of Air India, the government will not face any problem in the sale of those companies, which it wants to privatize. These include some companies including BPCL and some banks. Jefferies has also said that the victory in the elections is certain that the government’s focus on infrastructure will continue. In the last few years, the Modi government at the Center has spent a lot on infrastructure.
On the other hand, oil marketing companies have not increased the prices of petrol and diesel since November. Due to this they are suffering a lot. It is believed that the companies will have to increase the fuel prices immediately to avoid huge losses. This will have a good impact on the stock of oil marketing companies.
Geopolitical events will have an impact
Despite the victory of BJP in the election results, the impact of Ukraine-Russia battle will be visible on the stock markets. On the other hand, the effect of increase in interest rates in America and high crude prices will also remain on the markets. Brokerage firm Motilal Oswal says that till these major issues are resolved, volatility will remain in the markets. If crude oil remains above $100 a barrel in the next financial year, it means that inflation will cross 5.6 percent. The ratio of Current Account Deficit (CAD) to GDP will remain above 3.
However, the election results are positive in terms of stock markets and economy. The reason for this is that it does not seem to be expected to make a big political change in the coming years. Stock markets like political stability. BJP’s victory in UP has given a hint of future politics. With this, the government will not face any problem in continuing its economic policy.
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