From Deccan Herald: 2024-06-08 00:50:54

Investors are watching closely as the Modi premium in Indian equities comes under scrutiny due to the weaker-than-expected mandate in the national election. Policy continuity is key for global money managers, with skepticism from foreign investors evident as Indian stocks trade at an 80% premium to emerging-market peers.

Despite having strong political stability and policy continuity under Modi’s 10-year leadership, India’s high valuations make it one of the most expensive markets globally. The potential slowdown in policy making under a coalition government poses a risk, with investors closely monitoring key ministries and the possibility of populist measures.

Some global funds view any weakness in Indian stocks as a buying opportunity, given the strong economic fundamentals and growth prospects. Historical data shows that Indian stocks have performed well under coalition governments, and many investors believe that the pro-growth, investor-friendly agenda will continue under the BJP.

While some investors remain optimistic about India’s growth story, others are adopting a defensive approach and waiting to see if growth-focused policies will be maintained. The post-election period will be crucial in determining the future direction of Indian equities, with global money managers closely monitoring policy decisions and market dynamics.



Read more at Deccan Herald: Modi premium for Indian stocks gets a hard look after elections