How Elections Impact The Indian StockMarket

Starting off with 1991

– Before 1991, the economy struggled with high deficits, inflation, and low forex reserves. – P.V. Narasimha Rao's tenure as Prime Minister brought positive change. – Scandals like the SBI Harshad Mehta scam made the markets very risky.. – The Sensex, representing the stock market, surged by 39% in the year-end. – Economic reforms opened up the economy and attracted foreign investors.

Moving forward to the year 1999 

The NDA's resurgence with Mr Atal Bihari Bajpayee inspired confidence nationwide.  The Sensex surged by 7%, as predicted, sparking a three-month upward trend. This bolstered GDP growth to 6-7%.

Next comes the Unexpected 2004 

In 2004, the market was expecting a return of Mr Atal Bihari Vajpayee and NDA. However, Congress's arrival marked the market's fall by 15% in just 2-3 trading sessions due to the mismatch in expectations and the election outcome.

In 2009, UPA came back to power  

Markets surged by 17% in a single day but stayed shaky due to past instability. The 2008 Crisis rattled the world economy. Despite low trust in the government, the Sensex rose by 15.5% in the initial three years.

2014 sees the Modi Wave  

Investors gained confidence with the NDA's strong majority win, buoyed by the success of Namo slogans and the Modi Wave. Despite a 40% growth in the stock market over the next four years, some experts felt it could have been faster given the NDA's strong position.


During the 2019 Indian elections, the stock market reacted to political news. I On the election day, the Sensex dropped by 1314 points,  After the elections, the market experienced significant gains, reaching all-time highs.  People believed that the government's stability under the BJP would lead to positive changes.


A surprise change in government, like in 2004, could drop markets. If the BJP doesn't win big, investors might not be thrilled.  But if the BJP wins decisively, markets could rally. 

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