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UBS says Modi’s victory ‘key’ to rich stock valuations, Investors have already priced in Modi’s victory in 2019

UBS Private Ltd says that Narendra Modi’s victory in the 2019 General Elections is key to India’s rich stock valuations. Most investors, however, have already priced in Modi winning a second term at the office. UBS has complimented Narendra Modi’s economic agenda and said the optimism towards it has helped investors brush off weak earnings.

While not trying to predict the outcome of the general elections, UBS has advised investors to keep an eye on three factors. The alliances formed by the opposition party have the potential to ruin BJP’s chances at retaining power at the Center. The analysts observed that the BJP may not have won as many seats as it did in 2014 if key opposition parties had joined hands. The analysts also remarked that the results of state elections this year could indicate the mood of the nation. However, they admitted that results of state elections do not necessarily reflect people’s sentiment on national issues as they did not “consider differences in voting patterns for state and national elections.” Opinion polls are the third factor that has to be taken into account.

The analysts further wrote, “With the election still 12 months away, only one thing is clear: uncertainty (either around the timing or party agenda). If portfolio flows slowly due to election uncertainty or the recent rise in US inflation (and yield), then the rupee could come under pressure.”

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OpIndia Staff
OpIndia Staffhttps://www.opindia.com
Staff reporter at OpIndia

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