Prime Minister Narendra Modi predicted a significant boost in the stock market following the election results on June 4. He expressed confidence in the third time victory of the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA).

In an interview with the NDTV Profit, the Prime Minister expected a stock market rally within a week of the June 4 election results due to the positive impact of the government’s policies on investor confidence.

Earlier also in an interview, Home Minister Amit Shah had urged the investors to consider purchasing stocks before June 4.

Shah in an interaction with the same channel cautioned against linking recent stock market fluctuations with the 2024 Lok Sabha elections. The Home Minister expressed optimism, and forecast a surge in the domestic stock market.

“I can’t anticipate stock market moves. But normally whenever a stable government is formed at the Centre, the market sees a rally. I see 400-plus seat wins for the Bharatiya Janata Party, a stable Modi government coming, and thus market rising,” he had said.

Finance Minister Nirmala SItharaman said the families are actively opening demat accounts believing in the Indian stock market. Households savings are finding their way into equities, which shows the trust in the market, she maintained.

“Middle class families realise that even if it is risk-laden, there are better returns thus showing a willingness to invest in stocks and shares,” she had said.

Benchmark indices BSE Sensex and NSE Nifty 50 have been volatile recently. The Nifty fell more than 4 per cent to 21,821 after hitting an all-time high of 22,794.7 in early May. It has since recovered to 22,500.

So far in May, the foreign investors have pulled out a massive Rs 28,200 crore from Indian equities, owing to uncertainties about the outcome of the general elections and attractive valuations of Chinese markets.

According to the data with the depositories, foreign portfolio investors experienced a net outflow of Rs 28,242 crore in equities this month (till May 17).

Notably, this withdrawal was way higher than a net pullout of over Rs 8,700 crore in April. Last month, the withdrawal was based on concerns over a tweak in India’s tax treaty with Mauritius and a sustained rise in US bond yields.