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.”

Stock market: BJP supporters during a public meeting of Prime Minister Narendra Modi for Lok Sabha elections, in Dhar, Madhya Pradesh. (PTI)

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.”

Bernstein's 4-case probability scenario for elections and stock markets

Bernstein released a four-case probability scenario:

1. If BJP wins 290 seats or more, there could be an immediate market rally followed by short-term profit booking.
2. If BJP wins anywhere 260-290 seats, there could be mild profit booking near term.
3. If BJP gets 240-260 seats, there could be moderate to heavy profit booking in near term.
4. If BJP gets 240 seats, markets could see heavy profit booking in near term.

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.”