Election 2024:Election season has started in India. Voting for the assembly is being held in five states of the country from November 7. Lok Sabha elections (Loksabha Election 2024) is being seen as the semi-final. After the results of the assembly elections are out, preparations for the Lok Sabha elections will begin. Meanwhile, both domestic and foreign fund managers are closely examining past trends to assess the possible impact on the stock market in the next six months. According to an ET report, past data shows that the Indian stock market’s benchmark index Sensex has shown resilience and excellent performance during times of political uncertainty and change. Between 1980 and 2019, the six months preceding 11 general elections saw an average return of 14.3% for the Sensex. Looking at the figures, it can be estimated that the Indian stock market can grow rapidly even amidst political uncertainty. According to analysts, the strong performance of the market has been due to hopes regarding the formation of a stable government.
Pre-elections will see a rise in shares.
According to ET, Apoorva Sheth, Head of Market Perspective at SAMCO Securities, says that looking at the current market scenario and past data, it seems that there could be another pre-election rally with softening in 10Yrs US bond yields. Increased political spending related to elections also contributes to the positive sentiments in the market. The last elections in the country were held in the year 2019. Six months before that election, there was a rise of about 10 percent in the Sensex. In the 2014 elections, current Prime Minister Narendra Modi defeated Congress by a huge margin. This year, six months before the elections, the Sensex had given a return of about 16 percent. Whereas, in the year 2009, Sensex had made a historical record. In the six months after the elections, there was a tremendous jump of 59.8 percent in the Sensex. The only exception for the Indian stock market since the 1980 general elections was before the 1998 elections. Before the 1998 general elections, the Sensex had fallen by about 9.3 percent.
The market had risen 25 percent before the elections in 1996.
1991 was a period of political instability. In 1989, Janata Dal government was formed by defeating Congress. Which lasted with difficulty. Therefore, elections were held again in 1991. Even in such a situation, Sensex saw a rise of 0.1 percent before the elections in 1989 and 2.6 percent before the elections in 1991. Congress formed a stable government in the 1991 elections. Therefore, in 1996, six months before the elections, the market saw a surge of 25.6 percent. In 1996, United Front came to power by defeating Congress. Meanwhile, CLSA increased its allocation in the market to 20 per cent overweight from the earlier 40 per cent underweight. He says that there is a possibility of Modi government returning after the general elections to be held in April-May 2024. In such a situation, the possibility of better performance of the market remains. As the Indian general elections are approaching, market experts and investors are closely monitoring these historical trends and current market conditions to take informed decisions.
What is the market situation today?
On Thursday, the Indian stock market fell in pre-opening. However, he recovered immediately and played a stormy innings. Earlier, BSE’s 30-share Sensex fell 168.91 points to 65,507.02. Whereas, Nifty was seen slipping 48.45 points at 19,627. Then immediately the market started showing momentum. Sensex was trading at 65,777.64 with a gain of 101.16 points while Nifty was trading at 19,698.45 with a gain of 23 points. Among Sensex companies, shares of Bajaj Finance, Power Grid, Bajaj Finserv, JSW Steel, Titan and Tata Steel were in loss. Shares of NTPC, Tata Consultancy Services, Tata Motors and HCL Technologies were among the gainers. At 3 pm, the Sensex was trading at 66,352.04 with a rise of one percent i.e. 676.11 points. Whereas, Nifty was trading at 19,847.90 with a rise of 0.88% percent i.e. 172.45 points.