We all witnessed how Narendra Modi-led NDA forming the government in 2014 with a strong majority and support across the nation. But do you know how Modi government reforms impact stock market trends?
Not only in India even the whole world was amazed to see one of the strongest contenders has won the election and become prime minister of India. Modi-led NDA government’s prime motive was only to develop the nation and eradicate corruption.
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Modi government has tried to raise foreign direct investment(FDI) in the Indian economy. It has also increased spending on infrastructure and reduced spending on healthcare and social welfare programs. Modi tried to bring efficiency in the bureaucracy by centralizing power.
Modi government reforms impact stock market greatly as it has renewed focus on reforms. Furthermore, the proposal to implement goods and services tax (GST) and measures by the government to boost agricultural income as well as productivity.
This government act awesome in the past 3 years like promoting Make in India, demonetization, GST, RERA and much more.
You will be reaping the benefits in the coming years in the form of GDP growth, fiscal discipline, curbing black money and maintaining inflation.
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How Modi Government Reforms Impact Stock Market Trends
Indian government’s policy initiatives and the BJP’s win in the Uttar Pradesh elections also triggered hopes for long-term political stability in the country.
It actually reinforced investors’ faith in the reforms process since and the Modi-led (NDA) government came to power at the center.
The government’s policy initiatives and the BJP’s win in the Uttar Pradesh elections also triggered hopes for long-term political stability in the country.
It actually reinforced investors’ faith in the reforms process since and the Modi-led (NDA) government came to power at the center.
Economic reforms like Goods and services tax (GST) and hopes of political stability drove market participation. Furthermore, it boosts the confidence of domestic and foreign institutional investors.
Key Impact of Reforms On Stock Market
The huge inflow of liquidity from mutual funds (MFs), FIIs and DIIs greatly impact the stock market in a positive way. Everyone is talking about growth and suddenly the whole world is bullish in India
Really Modi government reforms impact stock market trends and some stocks doubled in the last three years. Stocks like Bajaj Finserv, Rajesh Exports, gave more than 200% returns.
Furthermore, TVS Motor Company, Piramal Enterprises, HPCL, and Bharat Electronics also gets doubled.
Despite geopolitical concerns, hawkish US Federal Reserve, the Indian stock market surged to record highs. You were able to beat benchmark index by a wide margin in last three years if you have invested in mid and small-cap stocks.
Since the Modi government came to power and the reforms initiated all the midcap and small cap stocks run a lot. The stocks have been able to deliver awesome returns in the last three years and keep the momentum going.
However, over the past year or so, we have seen a bull run in Indian stock indices. It is because of robust foreign fund inflows and strong domestic investor participation.
The stock market is positive due to the government’s several reform initiatives and future plans to boost economic growth.
Fundamental Macro Factor – Political Front
Modi government reforms impact stock market trends and so your earning. Government reforms are one of the fundamental macro factors which affect stock movements.
Hence, keep an eye on government activities before you invest in the stock market. You may not like politics but you must aware of it to make money from stock trading and investment.
Furthermore, it boosts the confidence of domestic and foreign institutional investors. Demonetisation which banned high-value notes dented sentiment a bit.
Despite demonetization, market momentum picked up especially after BJP win in Uttar Pradesh elections.
Earnings have also shown growth besides note ban and the stocks continue its rally. Indian stock market with benchmark indices Sensex and Nifty currently hovering around record highs.
Stocks have rallied massively in the last three years with 11 stocks gaining a huge 1000-1800% in the period. Around 200 stocks have gained over 100-1000% in these three years.
Have a look at 50 stocks and Modi Government Reforms Impact Stock Market
| Sl. No. | Stock Name | Stock Price (27 June 2017) | Stock Price (26 May 2014) | % Change |
| 1 | Ducon Infratechnologies Ltd | 34.25 | 0.31 | 10948 |
| 2 | Kushal Tradelink Ltd | 184.05 | 3.6 | 5013 |
| 3 | Uniply Industries Ltd | 302.8 | 5.72 | 5194 |
| 4 | Medicamen Biotech Ltd | 553.25 | 10.84 | 5004 |
| 5 | Fiberweb (India) Ltd | 322.3 | 7.73 | 4069 |
| 6 | Mangalam Drugs and Organics Ltd | 159.05 | 6.08 | 2516 |
| 7 | Stylam Industries Ltd | 770.15 | 25.8 | 2885 |
| 8 | Goyal Associates Ltd | 5.72 | 0.2 | 2760 |
| 9 | SVP Global Ventures Ltd | 393.75 | 13.49 | 2819 |
| 10 | Star Paper Mills Ltd | 198.45 | 9 | 2105 |
| 11 | National Fittings Ltd | 242.2 | 11.49 | 2008 |
| 12 | Tasty Bite Eatables Ltd | 4,758.35 | 240 | 1883 |
| 13 | Sagar Productions Ltd | 13.5 | 0.64 | 2009 |
| 14 | Cupid Ltd | 278.5 | 14.39 | 1835 |
| 15 | Prima Plastics Ltd | 263.4 | 15 | 1656 |
| 16 | Capital Trust Ltd | 373.4 | 20.95 | 1682 |
| 17 | Suyog Telematics Ltd | 345 | 20.62 | 1573 |
| 18 | Cambridge Technology Enter. Ltd | 91.25 | 4.65 | 1862 |
| 19 | Sat Industries Ltd | 25.65 | 1.65 | 1455 |
| 20 | Moschip Semiconductor Tech Ltd | 51.25 | 2.78 | 1744 |
| 21 | Emmbi Industries Ltd | 186.2 | 12.07 | 1443 |
| 22 | Pondy Oxides and Chemicals Ltd | 426.65 | 28.95 | 1374 |
| 23 | Caplin Point Laboratories Ltd | 563.35 | 35.43 | 1490 |
| 24 | NGL Fine-Chem Ltd | 388.25 | 24.5 | 1485 |
| 25 | Kingfa Science and Technolgy Ltd | 724.1 | 48.78 | 1384 |
| 26 | Vama Industries Ltd | 20.05 | 1.5 | 1237 |
| 27 | Kellton Tech Solutions Ltd | 109.6 | 8.42 | 1202 |
| 28 | Axtal Industries Ltd | 69.70 | 5.59 | 1147 |
| 29 | V2 Retail Ltd | 248.9 | 15.8 | 1475 |
| 30 | Dwarikesh Sugar Industries Ltd. | 412.45 | 34.3 | 1102 |
| 31 | Padmalaya Telefilms Ltd | 11.44 | 1.11 | 931 |
| 32 | CMI Ltd | 211.6 | 15.62 | 1255 |
| 33 | Rushil Decor Ltd | 766.45 | 58.6 | 1208 |
| 34 | Avanti Feeds Ltd | 1376.6 | 107.23 | 1184 |
| 35 | Astec LifeSciences Ltd | 560.85 | 44.55 | 1159 |
| 36 | Shri Keshav Cements & Infra Ltd | 178.05 | 16.55 | 976 |
| 37 | Associated Alcohol and Breweries Ltd | 120.45 | 9.73 | 1138 |
| 38 | Mold-Tek Packaging Ltd | 280.85 | 24.53 | 1045 |
| 39 | Minda Industries Ltd. | 600.45 | 47.14 | 1174 |
| 40 | Indo Count Industries Ltd | 165.6 | 14.43 | 1048 |
| 41 | Websol Energy System Ltd | 110.6 | 10.61 | 942 |
| 42 | Brawn Biotech | 69.8 | 5.55 | 1158 |
| 43 | Coral Laboratories Ltd | 588.05 | 92.95 | 533 |
| 44 | Lactose India Ltd | 121.25 | 10.86 | 1016 |
| 45 | Amulya Leasing and Finance Ltd | 308.00 | 30 | 927 |
| 46 | Gini Silk Mills Ltd | 386.75 | 32.35 | 1096 |
| 47 | Shiva Texyarn Ltd | 330.55 | 27.15 | 1117 |
| 48 | Sarda Plywood Industries Ltd | 264.2 | 17.48 | 1411 |
| 49 | Chaman Lal Setia Exports Ltd | 96.25 | 8.92 | 979 |
| 50 | Nettlinx Ltd | 89.65 | 9.13 | 882 |
If I missed something out of government reforms, then let us know in the comments section.
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Published on: Oct 16, 2017
what will happen after 2019 elections? if bjp wins or loose ,whatever it may be then what will be the impact on the share market
If Modi govt wins 2019 election convincingly, then the market will move up. However, you never know what will happen but one thing is certain that market may go down for short-term only. It may give you even negative return but you have to keep investing in good and strong fundamental stocks. Election results benefit you for short-term only. So, act like smart investors to survive in the stock market and keep investing for long-term.