The topsy-turvy nature of Indian equities in the last few months exposes the current fragility of stock markets as investor sentiment lacks conviction. With steep valuations, can the markets shift gears from the election mandate?
The election verdict of the BJP (Bharatiya Janata Party) lacking a simple majority questions this conviction and raises doubts over a stable government and policy-making styles.
Illustration: Chaitanya Dinesh Surpur
A roller-coaster ride left those invested in Indian markets with an almost-nauseating experience as the election results threw a spinner, in fact, polar opposite to what all the exit polls had predicted. The markets crashed over 8 percent on election results day (June 4), following a 4 percent surge pole-vaulting to record highs by both the benchmark indices just in the previous trading session. After a brutal sell-off on results day, markets have been recovering as the new government led by the NDA (National Democratic Alliance) returns for a third term, but under changed circumstances leading to a coalition.