The Indian stock market has shown varying reactions to election results over the past decade. Let’s delve into historical data to understand how the stock market responded during the last several Lok Sabha elections:

1. 2004 Lok Sabha Elections:
   • Result: The unexpected victory of the Congress-led UPA coalition led to a market crash. The markets went down further over the next few trading days as it became clear that the newly formed coalition government would be supported by left parties as well.
   • Recovery: It took around six months for the markets to return to levels seen prior to the election cycle¹.
2. 2009 Lok Sabha Elections:
   • Result: The market soared in 2009 as the BJP-led NDA’s victory was already factored in by investors. Weakness in larger economic fundamentals led to investors booking profits as the results were announced, causing a fall in market prices.
   • Recovery: The market recovered swiftly from this dip and continued its upward trajectory¹.
3. 2014 Lok Sabha Elections:
   • Result: The Sensex and Nifty 50 had positive returns in 2014. The Bank Nifty outperformed the Nifty 50, with an average up-move of around 21%².
   • Performance: The Sensex surged over three-fold during PM Modi’s 10-year regime, from 24,000 points to 75,000 points. Nifty followed a similar trail, crossing the 22,700-point mark in 2024 from nearly 7,200 points in 2014³.
4. 2019 Lok Sabha Elections:
   • Result: The BJP-led NDA’s victory was already priced in by the markets. However, weakness in economic fundamentals led to investors booking profits as the results were announced, causing a temporary fall in market prices.
   • Recovery: The market recovered in the subsequent months after the election cycle¹.
5. 2024 Lok Sabha Elections (Current):
   • Expectations: The outcome of the 2024 elections is pivotal for investor sentiment. The equity benchmark indices, Sensex and Nifty 50, are currently facing heightened volatility.
   • Recent Performance: In the past six months, the Sensex has gained over 11%, while the Nifty 50 has rallied more than 14%².

In summary, election results have historically influenced the Indian stock market, but the impact varies. While some elections led to immediate market reactions, others saw recoveries over time. As we await the 2024 election results, investors remain watchful of market movements and policy trajectories

Learn more 1 hindustantimes.com 2 livemint.com 3 business.outlookindia.com 4 indiatimes.com