Pre-election market performance: Indian equity market

From Niteen S Dharmawat

We are about to enter into a general election year (unless we witness an early election) and there is a wide belief that elections and politics affect equity market to a great degree. So does equity market really get affected during the pre-election year? If it does then is it a positive or negative impact, what are the challenges and drivers etc. that impact its performance?

I analyzed the pre-election years of last 6 elections spread over more than 20 years. Though, the size and maturity of the economy has come a long way from what it was in 1991 but there still exists similar political and economic uncertainties that we faced earlier. This particular point has amazed me after I saw the performance of the equity market.

Also note that I have covered the performance of year 2009 with a special slide.

This note is with an intent to bring rationality to our actions. Let me know your views.

p.s.: the data used in the PPT were taken from BSE website about 10 days ago.

Pre election year performance.pptx


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