Markets could respond favorably on Monday after PM Modi's oath-taking ceremony, according to analysts

Although alliance fears will continue to affect investor mood, market participants believe that worries over policy continuity have temporarily faded.

Although alliance difficulties will continue to affect investor mood, market players believe that worries over policy continuity have temporarily faded.

Following the swearing-in event on Sunday, which witnessed the return of most of the notable figures from the previous government, markets are predicted to respond favorably on Monday.

Although alliance fears will continue to affect investor mood, market participants believe that worries over policy continuity have temporarily faded.

The market will respond favorably to this as consumers value consistency. Although alliance problems still exist, the early worries have passed, according to independent market analyst Ambareesh Baliga.

Although there will still be some uncertainty and the sword will continue to dangle, market volatility is predicted to decrease since there are no significant events scheduled for the next several weeks. Budget would be the next major event, he said.

In a star-studded ceremony on Sunday, leaders of neighboring countries as well as representatives from India Inc. and the entertainment industry swore in as 72 ministers of the BJP-led government led by Prime Minister Narendra Modi, who took office for a third term in a row.

Significantly, top cabinet officials from the previous administration, such as Amit Shah, Nirmala Sitharaman, Rajnath Singh, Nitin Gadkari, and S Jaishankar, took an oath on Sunday.

This takes on importance since the election results, which showed the BJP unable to secure an absolute majority on its own, sparked speculation in the market that the party would be unable to implement its platform without the support of coalition partners.

Nobody is doubting India's potential for growth. All that's needed to determine if the velocity would resemble Modi 2.0 is to wait and see. It's also important to keep in mind that the government may implement some strict measures in the first year of the third term if it wants to set the stage for long-term development, according to Baliga.

Similar to this, a fund manager of an AIF company said that while the swearing-in event has cleared up many questions, the market will still wait for further clarification about portfolio allocation. As a result, volatility is anticipated to somewhat decrease.

The volatility of last week was caused by the exit polls and the subsequent real results. Since those two significant events have passed, some consolidation at the present levels is to be expected. The market will now be watching for indications of policy consistency, the speaker said, requesting anonymity.

Coincidentally, according to a Moneycontrol survey conducted last week, the two largest dangers to markets in the next months are policy stalemate and a downturn in profits.

However, the majority of respondents said that if elements such as political stability, policy consistency, and earnings growth are apparent in the near future, the market may rise.