Trading strategies for the 2024 Lok Sabha elections: With the sixth phase of voting for the 2024 Indian Lok Sabha elections now over, poll experts are busy discerning the outcome of the Indian Lok Sabha elections to be held on June 4, 2024. However, stock market experts are also zeroing in on segments that have the potential to deliver above-market average returns in the short, medium and long term. According to stock market experts, the Indian stock market is expected to remain highly volatile from June 1 to 4, 2024, and investors need to ensure safety of capital in this highly volatile market. Experts said that while India’s VIX is currently in the range of 19 to 23, the Indian stock market volatility index may rise further. They also said that most pre-poll surveys have indicated that a Bharatiya Janata Party (BJP)-led NDA government has been formed in New Delhi, and therefore, a lot will depend on the outcome of the Indian Lok Sabha election exit polls to be released on the evening of June 1, 2024. They advised traders and investors to keep an eye on manufacturing, banking, and power & energy sectors as these are likely to outperform other sectors in stock price rally after the Lok Sabha elections. He also advised investors to avoid “monkey and donkey” stocks and focus on blue chip stocks that have strong quarterly performance and low or no debt exposure.
How should I trade on the day the Lok Sabha election results are announced?
“We expect a new bullish trend after the Lok Sabha elections 2024 results are announced. Hence, my suggestion to traders and investors is to look out for quality stocks of companies that are debt-free or have relatively low debt exposure. However, a string of strong quarterly performance is mandatory before looking at the debt exposure of a company,” said Sandeep Pandey, founder, Basav Capital, who unveiled a stock market strategy keeping the Lok Sabha elections results in mind. He added, “One should avoid looking out for operator-led monkey and donkey stocks as they also rise in a bull market.”
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“The first rule while trading keeping in mind the Lok Sabha election results is to ensure safety of your capital. The second rule is to never forget the first rule. You can make profits only if you have capital in hand,” said Sandeep Pandey of Basav Capital.
Echoing Sandeep Pandey’s views, Avinash Gorakshkar, head of research at Profit Mart Securities said, “Most of the preliminary surveys are predicting that a BJP-led NDA government will be formed after the Indian Lok Sabha elections. Hence, if the preliminary surveys and results are in line with each other, one would need to keep an eye on the areas where the Modi-led NDA government is focusing as the government’s policies are likely to continue.”
Segments to watch
Talking about segments that can be targeted for value picks, Sandeep Pandey of Basav Capital said, “With the current central government, there has been a continuous increase in capex in the manufacturing sector and one can consider this segment as a target segment for value picks. Apart from this, the recent loan by the Reserve Bank of India will provide additional liquidity to Indian banks to cater to the rising demand in the manufacturing sector post the Lok Sabha elections. The power and energy segment is another segment that can be considered keeping in mind the Lok Sabha election results.”
Disclaimer: The views and recommendations expressed above are those of the individual analysts, experts and brokerage firms and not that of Mint. We recommend that you check with a qualified professional before making any investment decisions.
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Published date: May 28, 2024 6:14 AM
