These days’ Indian investors are anxious concerning their economic growth, which is supposed to be destabilized by the upcoming elections in the country. If we look back at 2014 elections, investors were excited with assumptions that BJP will come into government this time with Narendra Modi as prime minister. They were hoping that he will give priority to the development by making more reformed policies and governance. When the results of General Elections 2014 were announced, that positively impacted the stock market performance. Investor’s reaction to the results was very positive, and BJP’s prime ministerial candidate showed an impressive performance of economic governance in Gujarat.
Look, the stock market always works on speculations, assumptions or anticipations about something positive and negative. History has made us to believe that any big event can impact stock market performance as per peoples’ assumptions. Furthermore, this stock market gets stable and adjusted when that event actually happens. There is one very widely accepted beliefs about the market, “Market moves on the news and gets adjusted on actual things happens.” You can make huge profits through stock market performance during elections by buying or selling the moment news or assumptions made, and after that selling and buying when things actually happen.
Looking at the Indian economy, BJP party is always considered as investors friendly by the market participants. It is widely considered as this party has a more policy-oriented approach than freebies government. Indians are confident that now BJP will come into government, and they will get the market momentum by making more productive policies and bills. In the hope of these assumptions, they have started buying stocks to later make profits from them by selling these stocks when the market goes up. But the irony is that, if the BJP party could not come into government, the market could definitely crash up to 10 percent or even more. Therefore, the stock market is actually a confidence game and it widely works on speculations and news about the big events like elections. You will see the stock market will fluctuate even after 12th May. Actually, this opinion poll cannot conclude or ad any value to any company or stock market, but people will still buy and sell shares according to these speculations. Hoping I gave a bit sense of this irony.
But this time Congress is also made their grand entry with the state election results. There is a chance that if Congress wins the stock market became volatile, but soon after it will be steady or uptrend after a few days. Lets hope.