Between 1980 and 2019, the six months preceding the 11th general election saw an impressive average return of 14.3% for the Sensex. Analysts say optimism regarding the formation of a stable government has become increasingly strong.market performance In the last four decades.
Looking at the current market scenario and analyzing historical data, it appears that there could be another pre-election rally along with the cooling trend of 10-year US bond yields, says Apoorva Sheth, head of market perspective at SAMCO Securities. Is. Increased political spending associated with elections also contributes to positive market sentiments.
Elections and Sensex
In 2019, the Sensex saw a rise of nearly 10% in the six months ahead of the elections, while in 2014 it recorded an even higher return of 16%. However, the 1998 election stood out as an exception when the Sensex fell 9.3% before the election. In contrast, in the six months before the 2009 elections, the Sensex displayed an extraordinary rally of 59.8%.
Furthermore, the promise of a stable government has significantly impacted the market. In a recent update, leading brokerage and investment group CLSA has increased its allocation to Indian equities From the previous state of 40% underweight to 20% overweight. They hope that even after this the Modi government will remain in place indian general electionWhich is scheduled for April or May 2024.
As the Indian general elections are approaching, market experts and investors are closely monitoring these historical trends and current market conditions to take informed decisions.
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