How is the combination of Lok Sabha elections and stock market? – how general election and share markets are connected – 2024-04-04 15:18:27

2024-04-04 15:18:27
New Delhi: How will the Lok Sabha elections affect the stock market? The picture of this question may become clear after the election results are revealed on June 4. But, recent history shows that the stock market generally rises after the Lok Sabha elections. What is the connection between elections and market:

What is the atmosphere like before the election results?

• In 2004, before the election results, the returns of Sensex and Nifty were negative.
• Both indices had posted gains ahead of the results in 2009, 2014 and 2019.
• A rise of 26% was recorded in Sensex and 24% in Nifty before the 2009 results.
• According to brokerage firm Motilal Oswal, there was a rise in the 6 months before the election results.
• Nifty saw a rise of 36.3% in the six months before the elections in 1999 and 6.7% in 2004.
• There was a rise of 30.6% in the six months before the elections in 2009 and 17.6% in 2014.
• In 2019, Nifty 50 gained 11.5% in the 6 months before the elections.

How was the picture after the elections?

• In the election years from 2004 to 2014, the market closed with gains.
• A 20% decline followed the results in 2004, but finished the year with positive returns.
• In 2009, Sensex and Nifty closed with a rise of 40% from the results till the end of the year.
• After the elections in 2019, the Indian stock market could rise only around 5%.
• According to brokerage firm Motilal Oswal, Nifty has risen in the 6 months after the results.
• There was an increase of 5.4% in the 6 months following the results in 1999 and 9.3% in 2004.
• In 2009 there was a 37.8% rise in the six months following the results and in 2014 there was a 17.8% rise.
• In 2019, the Nifty 50 gained 1.5% in the six months following the results.

Which sectors are booming?

Sectors like banking, consumer durables and information technology have performed better than others after the election results. However, due to the increasing emphasis on infrastructure including power and green energy, the performance of these sectors and their related segments may also be good after the elections.