Bernstein's poll prediction: Nifty can give double-digit returns in 2024 if BJP wins…
Bernstein said, “This year's returns would likely stay at high single digits, with a possibility to remain low only in case of a frantic policy shift."
Global brokerage firm Bernstein predicted high single-digit or low double-digit returns for Nifty in 2024 if BJP wins more than 290 seats in the ongoing Lok Sabha elections. The brokerage said that there is a high probability of BJP winning 330-350 seats, adding, “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.”
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It added, “Continuity of power was known to equity markets, which is why we had a rally in Nov/Dec last year - playing again and again on the same theme leads to absurd outcomes for valuations - hence, we believe the focus will eventually return to macro, earnings growth, reasonability of valuations etc. The overanalysis brd self-induced stress the markets have seen over the past month is the only reason for the relief rally we call for.”
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Bernstein's 4-case probability scenario for elections and stock markets
Bernstein released a four-case probability scenario:
- If BJP wins 290 seats or more, there could be an immediate market rally followed by short-term profit booking.
- If BJP wins anywhere 260-290 seats, there could be mild profit booking near term.
- If BJP gets 240-260 seats, there could be moderate to heavy profit booking in near term.
- If BJP gets 240 seats, markets could see heavy profit booking in near term.
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The brokerage said, “This year's returns would likely stay at high single digits, with a possibility to remain low only in case of a frantic policy shift that can come with a change in government. The expectation building and revisions should continue.”
