If Modi Doesn’t Become PM, UBS Gives 3 Scenarios & Predicts On Stock Market

While the NDA is comfortably above the majority mark of 272 in the 543-member Lok Sabha, the BJP has fallen short of the magic number to meet the majority for the first time since 2014 and is now dependent on its allies to form the government.
The Election Commission has declared results for all 543 Lok Sabha constituencies, with the BJP winning 240 seats and the Congress 99. Making a strong comeback after Tuesday’s sharp decline, the 30-share BSE Sensex jumped 948.83 points to 73,027.88 in early trade. The NSE Nifty went up by 247.1 points to 22,131.60.
Global brokerages predicted positive things for the economy and the market on 3rd June touched high. But election trends didn’t turn out for the BJP as per exit polls. As BJP did not get a full fledged majority and it will now be dependent on its allies to form the government. Global brokerage UBS has made some predictions about the coalition government and its impact on the market. 
3 Scenarios By UBS Over Current Political Situation
Scenario 1
Even Modi comes back as the PM, with the alliance partners (which would mean giving them ministry portfolios etc). The government may not function as smoothly as the last 10 years when the PM office had a strong control over all government machinery. Given the alliances already in place, this seems to us the most likely scenario.
Scenario 2
NDA forms govt but with a new prime minister other than Modi.
Scenario 3
Alliance partners of BJP switch sides and the opposition I.N.D.I.A alliance comes to power. This could lead to meaningful changes in the trajectory of govt policy.
What Will Be Impact On Stock Market According To UBS
UBS said, out of the three, only the first situation is positive for the market. The pace of reforms will remain intact in the first scenario. Market valuations are expensive ,reported Zee Business.
Therefore, UBS remains ‘Underweight’ on India in the Emerging Market context. It said that a coalition  government may not be good for the market. UBS has also maintained an ‘underweight’ stance on India.
Global brokerage UBS says that a coalition  government may not be good for the market. 
(With Inputs from PTI)
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice.)