Stock Market Down During Election Results?

Since 1999, the history of indices of the Indian stock market has shown positive results during election days. However, the last six Lok-Sabha Elections have provided negative indices, especially election result days. 

June 4th has seen an all-time high NIFTY decline by 6% as PSUs and the lowest performers are Adani Enterprises and ports. Here is a glimpse of the Indian Stock Market’s performance on the previous election result day and key changes between the 2019 and 2024 elections.

Highlights Of The Stock Market On Previous Election Result Day:

When NDA’s first phase of election results were declared on 20th May 2019, the market was at an all-time high with a hitter 40,000 benchmark. However, the high rank remained for a few days.

On the previous Lok Sabha Election Result Day, which fell on 23rd May 2019, significant changes in stock market benchmarks. The NIFTY benchmark declined by 0.7%, which resulted in 11,657.05 points.

If we consider the Indra day high and Intra day low, then they are 12,041 points and 11,614 points on that day. 

The key reason for this decline was the BJP-led prime minister Narendra Modi’s victory 2.0, which showed a small decline in the stock market data compared to the previous election trend. 

Other reasons for the decline in the Sensex were domestic issues due to the trade tensions and global economic issues arising despite the Modi 1.0 still governing the country.

Now, let’s look at the current market data scenario on the day of the Lok Sabha election.

Highlights Of The Stock Market On June 4th, 2023:

The present scenario of election days has seen a significant decline in the stock market on the occasion of election results. The data shows there is a decline in NIFTY, Sensex, And all benchmark Indices around 8%. When we talk about the NIFTY, then it has lost to a 6% low during afternoon trading.

So, the NIFTY 50 has ended by 1379 points to 21 884 with a sharp decline of 5%. The reason behind the decline is the wrong win prediction of NDA, as the exit vote poll was reduced incredibly.

It shows that BJP 3.0 may not be so reformed to meet the market stat data and create disappointment by not falling under the major win percentage around the country. The result is creating an impact on the market, especially in FMCG stocks.

Key Changes Between 2019 And 2024 Stock Market Data On Election Result Day:

These two versions of elections have seen significant changes in the political landscape as well as the Indian Stock Market. 

In 2019, the BJP party led by Modi won the Lok Sabha election with a greater majority compared to the previous election in 2014. It has secured 303 seats in total, which was a huge success that also impacted market data. On the result day, the NIFTY was as low as 0.7%.

When we talk about the 2023 election results data, the predicted exit poll win for the BJP-led NDA was around 361 to 401 seats. However, the result was devastating. Although it has led the nation, the majority declined to 293, which is a huge difference.

The result greatly affected the stock market between these two elections. In 2019, although the market was low on the result day, it still recovered quickly in two days from a 0.7% low to a 2.48% high on return in NIFTY 50. 

The market data shows that the previous election returned around 29.1% in total in other months and 6% in the preceding election results month. However, 2024 has seen a decline in return due to many factors.

From wrong predictions in Exit polls to Modi factors, the decline is affecting the stock market. Other factors that are influencing the market are Tax policies and global trading factors, which have significantly declined the NIFTY 50 data by a 6% loss and a total 8% decline in the BSE and Sensex data, including the NIFTY standard, which is very high in comparison to the 2019 election.

Final Words!

So, for the sake of high returns on the stock exchange, the NDA government should focus on infrastructure, renewable energy, finance, hospitality, tourism, and defence sectors to increase the market value and get high returns on investments.