Sensex, Nifty will rise in 2019 despite Lok Sabha elections: Edelweiss

Updated:  Nov 21, 2018, 10:30 AM

Sensex Nifty Lok Sabha Elections 2019
While investors in India are worried about 2019 Lok Sabha polls and threats to economic growth, it’s not yet time to lighten up on equities, according to Edelweiss Financial Services Ltd. The elections are mere “interruptions” that won’t disrupt the nation’s economic structure or business cycle, analysts led by Aditya Narain wrote in a note earlier this week.
 
Political uncertainty is emerging as the key risk as PM Narendra Modi’s Bharatiya Janata Party faces polls in five states before the Lok Sabha elections to be held by May. Some opinion polls are predicting a win in Rajasthan for the main opposition Congress, and a close contest in Madhya Pradesh and Chhattisgarh—both of which are currently ruled by the BJP. The results, due on 11 December, may determine how Indian assets end 2018.
 
Edelweiss Financial Services Ltd is urging investors to focus on the second half of next year—a period that may see optimism return and the business cycle kicking into high gear. The NSE Nifty 50 Index may end 2019 at 11,800, about 11% higher than Tuesday’s close, the brokerage said.
 
“Don’t split hairs on India’s macros, valuations and earnings—split 2019 into two halves,” the analysts wrote. “The second half should be a smoother ride.”
 


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