Lok Sabha Election 2024: With poll jitters gone, can the market resume bull run in June?

The BJP-led NDA looks set to come to power for the third consecutive time when the election results will be declared on June 4, revealed exit polls on Saturday. The third Modi win will remove all the election jitters the stock market has gone through in May, said analysts. The 30-stock Sensex slipped 0.70% and Nifty fell 0.33% in a month.

However, Sensex has gained 1,473 points or 2% since the election started on April 19.  Similarly, Nifty climbed 534 pts or 2.42% during the period.

Of this, Sensex zoomed 1,994 points in April (April 19 to April 31) only.  Nifty too logged strong gains of 609 points from April 19 to April 31.

In May, high volatility amid low voter turnout in the initial phases prompted investors to be cautious during the Lok Sabha election. This pushed the market into red in May, snapping the winning streak of the last three consecutive months.
 
However, with uncertainty in poll outcome now out of the way, June could paint a different picture for the market.

Brokerage JM Financial believes the market is likely to log healthy gains after election results on June 4 and said that any dips should be bought into, highlighting its bullish stance post election results.
 
The brokerage prefers large caps over small caps and mid caps in 2024 as it looks for valuation comfort.

On the market front, JM Financial expects policy continuity will ensure opportunities in defence and capital goods space while valuation comfort is available in private banks and consumers. Unlike in the past, the brokerage expects large caps to outperform small and midcaps in this post-election cycle.
 
On a sectoral basis, it finds valuation comfort in private banks and consumption space, which are expected to outperform the benchmark in the near term. It finds the valuation of Nifty reasonable, currently at 20 times forward PE, closer to one standard deviation from long-term mean.