Ace investor Ruchir Sharma on stock markets after poll results: ‘If BJP doesn’t win…'

Ace investor and author Ruchir Sharma said that India should not take its strong GDP growth for granted. Citing examples of other countries that were once economic powerhouses, Ruchir Sharma said that he remains optimistic about India's long-term growth although the ongoing efforts are necessary. Speaking at the India Today Pop-Up Conclave, he also warned against taking economic success for granted like Canada, Germany, South Africa and Chile, whose economies were once doing well but now face major challenges.

Read more: Bernstein's poll prediction: Nifty can give double-digit returns in 2024 if BJP wins…

He said, “Never take growth or economic success for granted" He also highlighted need for substantial improvements in the on-ground environment to attract foreign direct investment (FDI). He said that India's FDI as a share of the economy stands at just over 1% of GDP in comparison to China's 4%.

India's strong wealth creation over the past five years has been majorly fuelled by domestic investments with minimal foreign participation, he said.

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But income inequality in India has reached a “record high” despite India having the highest number of billionaires globally, he pointed out.

On the stock market, Ruchir Sharma said that there could be significant negative market response if the Bharatiya Janata Party (BJP) secures fewer than 250 seats in the Lok Sabha elections. This comes as global brokerage firm Bernstein predicted high single-digit or low double-digit returns for Nifty in 2024 if BJP wins more than 290 seats.

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The brokerage said, “We expect a short-term rally either leading into elections or the week after results potentially breach our 23K Nifty target and then a profit booking as the reality of execution and valuations emerge. In our view, sectors that will lead are Infra, manufacturing, domestic cyclical, a bit of financials, and state-owned enterprises (PSUs) in general. Consumer and IT will lag. Small and midcaps may do better than largecaps for a few days.”