Market participants are assessing the election manifesto released by the Bharatiya Janata Party (BJP) as a document that encompasses the promise of continuity and enhancement of current policies. The manifesto also combines measures that some are calling 'aspirational', aimed at moving India’s economic progress to a higher gear.

Manifesto Musings - Who Said What

Economists at Citigroup have said that there is a definite aspiration in the manifesto towards making India a power to reckon with in terms of global manufacturing.

A PhillipCapital note anticipates the party to be more aggressive in terms of execution and policy development in its third term. "Additionally, it is likely to execute plans that were laid out in the previous regime, in its next term," the note added.

PhillipCapital also expects BJP's focus to stay broad-based, spanning across sectors over the next five years. The brokerage house is bullish on India’s economy and equities from a long-term perspective and expects the economy to swell to $6.7 trillion GDP by FY30 if BJP continues on the path of financial and macroeconomic stability. On Nifty50, it has projected a level of 40,000 by the turn of this decade.

Emkay Global Financial Services has put out a similar, bullish note, driven by BJP's probable return to power. The brokerage sees the party's manifesto as a positive read-through for Indian equities.

The spaces to watch out for, according to Emkay Global, could be capital goods, railways, defense, housing finance, tourism, and aviation, which are likely to be direct beneficiaries of BJP's manifesto promises. Textiles and pharma too are seen as probable winners.

Analysts at Emkay also see a positive medium-term outlook for the Indian stock markets, with a preference for infrastructure and manufacturing, along with a focus on small and mid-caps.

In a report published in November last year, global brokerage Morgan Stanley highlighted multiple scenarios that could play out in Indian stock markets based on the 2024 election outcome.

Morgan Stanley anticipated a 0-5 percent jump in the equity market, in the three months following the result outcome if BJP manages to clinch a clear majority.

Worst Case Scenario 

In a situation where a coalition government is formed and no party secures a clear majority, the market could see a decline ranging from 5 to 25 percent, the Morgan Stanley note said. If the leading party secures fewer than 200 of the 543 elected seats, resulting in a weak coalition, the stock market might even see a substantial 40 percent decline.

However, going by opinion poll trends and BJP's performance in recent state elections, such worst-case scenarios may seem only a statistical outcome.

Last month, a News18 poll had projected the ruling coalition of BJP-led NDA to come back to power for a third consecutive term. BJP's manifesto outlines the party's ambition to develop India's physical, digital, and social infrastructure to transform the country into a global manufacturing hub.