Know market’s response on the election result day for the last four Lok Sabha elections from 2004 to 2019.
Lok Sabha Election Results: The stock market is highly sensitive to political events, and the results of the Lok Sabha elections have historically had an impact on market behaviour. Markets tend to react positively to election results that favour a pro-business and stable government with a clear majority.
Most exit polls have predicted the win of BJP-led NDA in the 2024 Lok Sabha Elections.
Vinod Nair, head of research, Geojit Financial Services, said, “Exit poll has activated the optimism of a memorable win for the ongoing government, PSUs had a humongous rally, in anticipation of continuation of the reform gains, triggering further re-rate.”
Neeraj Sharma, AVP technical and derivatives research at Asit C. Mehta Investment Interrmediates, said, “Bulls maintain their grip on Dalal Street, with the Sensex and Nifty opening at record highs. Following the general election exit poll, the market saw broad-based buying, with the expectation that the BJP will return to power. All sectoral indices closed in the green, with capital goods, PSU banks, oil and gas, power, and real estate up 5-7 percent.”
Let’s analyse the market’s response on the election result day for the last four Lok Sabha elections from the last 2019 to going back to 2004.
2019 Lok Sabha Election
Date: May 23, 2019
Market Reaction: The markets reacted positively to the decisive victory of the BJP led by Narendra Modi. The Sensex surged by over 1,000 points (around 3.5%), and the Nifty also saw a substantial increase.
Reason: Investors welcomed the continuity of a stable government and the promise of continued economic reforms and policies aimed at boosting growth.
According to data compiled by Livemint, in 2019 both the Sensex and Nifty remained flat, falling over 0.76 per cent and 0.69 per cent, respectively, closing at 38,811.39 and 11,657.05.
- Sensex Intraday High: 40,124.96
- Sensex Intraday Low: 38,651.61
- Nifty Intraday High: 12,041.15
- Nifty Intraday Low: 11,614.5
2014 Lok Sabha Election
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Date: May 16, 2014
Market Reaction: The BJP’s clear victory led to a record-breaking rally in the stock markets. The Sensex jumped by over 1,200 points (around 6%), and the Nifty also surged by more than 300 points (around 6%).
Reason: The market was optimistic about the BJP’s pro-business stance and expected significant economic reforms and development initiatives under Modi’s leadership.
Sensex and Nifty experienced marginal gains, rising by 0.90% and 1.12% respectively, closing at 24,121.74 and 7,203.
- Sensex Intraday High: 25,375.63
- Sensex Intraday Low: 23,873.16
- Nifty Intraday High: 7,563.50
- Nifty Intraday Low: 7,130.65
2009 Lok Sabha Election
Date: May 16, 2009
Market Reaction: The United Progressive Alliance (UPA) led by the Indian National Congress won a majority, which led to a massive rally. The Sensex surged by over 2,000 points (17%), and the Nifty by more than 600 points (17%) in a single day.
Reason: The market welcomed the political stability and the continuation of economic reforms. Additionally, the victory without the need for support from the Left Front was seen as a positive for economic liberalization.
Sensex rose by 2.53% while Nifty surged by 17.74%, closing at 12,173.42 and 4,323.15, respectively.
- Sensex Intraday High: 14,284.21
- Sensex Intraday Low: 13,479.39
- Nifty Intraday High: 4384.30
- Nifty Intraday Low: 3673.15
2004 Lok Sabha Election
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Date: May 13, 2004
Market Reaction: Contrary to the other instances, the markets reacted negatively to the unexpected victory of the UPA, led by the Indian National Congress. The Sensex fell by over 800 points (around 12%), and the Nifty also saw a substantial drop.
- Sensex Intraday High: 5,487.34
- Sensex Intraday Low: 5,131.03
- Nifty Intraday High: 1,750.30
- Nifty Intraday Low: 1,625.10
DISCLAIMER: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Readers are advised to check with certified experts before making any investment decisions.
