Only 2 ‘Modi stocks' remain in CLSA’s India Focus Portfolio after Lok Sabha election results

Global brokerage firm CLSA, revised its India Focus portfolio, keeping only ONGC and Reliance Industries and excluding the remaining 52 ‘Modi stocks,’ after the Lok Sabha election results showed the BJP winning a lesser-than-expected number of seats.

The firm had earlier created a list of 54 companies that could be direct beneficiaries of the current government's policies, naming them as “Modi stocks” since they have gained, based on chances of the BJP coming back to power.

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Indian equity markets led by Modi stocks had approached the national elections with a lot of conviction in the continuity of a strong BJP government, said CLSA in a note, adding that the election verdict of the BJP lacking a simple majority, questions this conviction and raises doubts over a stable government and policy-making styles.

The brokerage cautioned about the expensive valuations of the stocks which position India as one of the most expensive markets globally, with its premium to Asia, Ex-Japan and EM peers exceeding one standard deviation above the historical average, LiveMint reported.

CLSA also removed L&T, from its India focus portfolio, replacing it with HCL Tech. The infrastructure giant had been in the portfolio since its inception in January 2021.

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