As India gears up for the 2024 general elections, the stock market becomes a crucial gauge of political sentiment and economic stability. This period usually sees market fluctuations due to investor caution regarding potential policy changes.
Goldman Sachs notes that in four of the last seven elections since 1996, the Nifty 50 saw over 10% growth in the six months leading up to the results. However, this time, Indian stocks seem pricier.
Historical data from JM Financial Services reveals that the Nifty typically rises in the months preceding a general election, with an average return of 21%. The Bank Nifty, except in 2009, has consistently outperformed the Nifty during election periods, averaging a 25.5% return.