Union Home Minister Amit Shah cautioned against directly correlating stock market fluctuations with the ongoing Lok Sabha elections, although he acknowledged the influence of "some rumors" on market volatility amid reports of lower voter turnout and lackluster corporate commentary from companies like Tata Motors during the earnings season extending selling pressure.
Speaking with NDTV, the senior BJP leader hoped for a potential surge in the market post-June 4, the day election results are due. "The market has nosedived in the past as well. So one should not link it directly to elections. Anyway, some rumours may have fuelled it. In my opinion, buy before June 4. The market is going to shoot-up," Amit Shah told NDTV Profit.
Equity indices have relinquished most of their gains for the year amid concerns surrounding the election outcome and sustained foreign investor sell-offs. Both the NSE Nifty 50 and S&P BSE Sensex plummeted over 1% on Monday morning, trading at 21,828.7 points and 71,880.07, respectively, as of 10:45 a.m. IST. The Nifty's growth has been marginal, while the Sensex has recorded slight losses.
Shah emphasized the market's historical fluctuations and cautioned against solely attributing them to elections. Encouraging investment before June 4, he anticipated a market upturn. Responding to queries about post-result market movements, Shah refrained from providing a detailed analysis but expressed optimism, citing the historical trend of markets rising with stable governments.
Taking exception, TMC chief Mamata Banerjee criticised Amit Shah for advising people to invest in stock markets.
"He cannot make such comments when the elections are on. This is a clear violation of the Model Code of Conduct. It is up to you whether you want to invest in the stock market. But remember, the BJP is not returning to power this time," claimed Mamata Banerjee.
The ongoing Lok Sabha elections, deemed the world's largest democratic exercise, commenced last month, with results slated for June 4. A relatively low voter turnout has garnered attention from observers.
Anil Rego, founder and fund manager at Right Horizons, attributed market volatility to election uncertainties and foreign sell-offs, noting a significant offloading of shares by foreign portfolio investors (FPIs) in May, the highest since January.
Mohit Khanna, fund manager at Purnartha One Strategy, echoed concerns over market uncertainty, citing lower voter turnout and lackluster corporate commentary from companies like Tata Motors during the earnings season as contributing factors to selling pressure.
(With inputs from IANS)
