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Major market movements have always been preceded with important business, economical or geopolitical news. With the General Elections around the corner, you can expect major fluctuations and movements from the market. What really affects investor and trader moods and how have the previous elections affected the market? Let’s take a look.

Factors Driving Market Fluctuations Before The Elections

Consumer Sentiment

the anticipation about the outcome of an election.

Consumer Confidence

the confidence in the Government’s policy to contribute positively towards the macroeconomic factors responsible for the development of the country.

Markets will rise if

  • Investors are confident that a Government’s policy will make the economy of the country better.
  • The Government is formed with an absolute majority.

Markets will fall is

  • Too many alliances are required to form a Government.
  • A general disinterest among citizens if a minority leader is elected as the Prime Minister.

General Elections and the Share Market – A History

For Reference – Nifty 50’s price on 01/01/1999 – 890.80

Prime Minister:

Atal Bihari Vajpayee

Nifty price two months before the election:

1254.00

Nifty price one year after the elections:

1417.20

Percentage Increase/Decrease:

13

Prime Minister:

Manmohan Singh

Nifty price two months before the election:

1913.62

Nifty price one year after the elections:

1956.30

Percentage Increase/Decrease:

2

Prime Minister:

Manmohan Singh

Nifty price two months before the election:

2843.10

Nifty price one year after the elections:

5304.00

Percentage Increase/Decrease:

86

Prime Minister:

Narendra Modi

Nifty price two months before the election:

6048.35

Nifty price one year after the elections:

8305.25

Percentage Increase/Decrease:

37

Prime Minister:

Yet to be determined

Nifty price two months before the election:

10893.65

Nifty price one year after the elections:

Percentage Increase/Decrease:

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