The BJP-led NDA alliance has elected Prime Minister Narendra Modi as its leader, and the stock market will be watching the distribution of ministerial portfolios when the NDA 3.0 government is formed.

Overseas brokerage According to Citi, PM Modi is expected to head a coalition administration for the first time, either at the federal or state levels, where the BJP does not hold a majority on its own. "It will be interesting to see how the coordination with the two most important allies (JDU and TDP) takes shape both in ministry allocation and beyond," stated the statement. 

In addition to the health, rural development, and transportation ministries, the Telugu Desam Party (TDP), which won 16 Lok Sabha seats under Chandrababu Naidu, may run for Speaker, sources informed to a credible source. Leader of the JDU, Nitish Kumar, whose party won twelve seats, is now in Delhi and, according to a media source, he will meet with the BJP leadership at a suitable moment to negotiate his party's representation in the Union Council of Ministers. The BJP secured 240 seats against the magical number of 272, but the NDA alliance was able to obtain 292 seats. On June 8, Saturday, Narendra Modi is seen taking the oath of office.

Because the BJP-led NDA alliance is a pre-poll pact, Motilal Oswal Securities said it expects less strife during the process of forming a government. It did, however, observe that the coalition government is emerging from two terms of a BJP-led majority in a clear. 

"We believe that this alliance would have fewer constituents with the anchor BJP at 240 seats and maybe a more seamless approach to governing than the previous NDA coalition governments of 1998–2004, which had over 15 constituencies with the BJP itself at 182 seats.

However, we anticipate that the administration will avoid divisive topics like the Farm Laws, One Nation One Poll, and Uniform Civil Code," the statement stated. 

A majority administration led by the BJP is virtually probable, according to IIFL Securities, but it will need to accomodate demands from the contentious 12-seat JDU and other allies. It stated that state elections will get increasingly difficult. 

According to JPMorgan, the BJP led coalition governments in 1999–2004 and 2014–2024 with success. It used the 2004 elections as an example, when the stock market was concerned about an unstable coalition when a Congress-led government with left party backing took power. 

Benchmark indexes had a decline following the outcome, but the markets recovered completely in less than six months, putting on one of the greatest bull runs until 2007 driven by robust economic momentum. Since 1991, the Nifty has historically returned 9% 8% in the three to six months after general elections, demonstrating that historically, a correction or drop has usually resulted in a purchasing opportunity over the long run," the statement read. 

However, according to Morgan Stanley, the equities market is not currently pricing in irreconcilable differences inside the NDA alliance.