Let’s Analyse, How do Indian elections affect the Stock Markets?
General Election 2019 is Round the Corner. Elections have always made investors jittery. There is always fear which starts creeping due to uncertainties associated with elections.
But why the elections are considered So important for stock markets.
Let’s see Relation between Election and Stock Market:
It is a known fact that whichever political party comes into the power in the General Elections 2019, they would be responsible for framing the economic policies of India.
On the basic level for everyone, the anticipated reforms and plans of the government drives the market sentiments. This is the only relation between the stock market and the general election.
The elections may impact the market for the short-term, but in the long-term, it is the policy decisions framed by the government, which matters the most.
Looking at the recent correction in Indian Stock Market it’s bit confusing that where would market lead.
Analysis of historical numbers can derive this relation well.
Lets See Past Elections and Performance of Sensex:
To better understand the stock market movement during elections, let us have a look at the Sensex performance for the last 20 Years: During this 20 Years India Had Majority Government, Coalition Government, Minority Government.
So all in all, the past data suggests that there’s always been an uptick in the market sentiment posts the General Elections results, no matter which party that comes to power.
What Should Be Your Strategy:
In the current situation where markets have corrected one need to have crystal clear strategy for investing.
To formulate the strategy for investing in this situation one needs to take a dig of fundamental as well as news analysis. To carry this analysis, years of experience and expertise is advised. In the choppy market situation where there are many multibaggers are at discounted price. Investors should take professional help during this tenure to grab the best possible opportunities from the markets. A SEBI registered Stock Advisor all you need to maximize your investment returns in the longer run.
Through the analysis, we see that the election impact is short term on the market. The main factors which create an effect are economic reforms, policies, and stability.
The data shows that it hasn’t mattered which party won or lost but will it be an unstable coalition or a majority government.
The Stock Market Typically Rises After Midterm Elections. This Year Is not Unique year but Typical year for Stock market .