In the Long Run, Elections Don't Influence the Stock Market - Chart Of The Day 21 May 2019 - Equitymaster
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In the Long Run, Elections Don't Influence the Stock Market
May 21, 2019


Once the exit polls were released on Sunday, the markets reacted positively.

The Sensex notched up gains of more than 1,400 points.

Clearly, the prediction of a BJP-led NDA victory has fired up the markets.

But there are two things that history has shown us.

One, is the exit polls should be taken with a pinch of salt. The 2004 elections are a classic case in point where the exit polls predicted a BJP win, while the actual counting resulted in Congress-led UPA gaining clear majority.

Second, near term reactions to elections aside, stock markets in the longer run have been influenced by the Indian economy and growth in corporate earnings.

Indeed, despite the Congress win in 2004 (something not factored in by the markets), the Sensex has been on a major bull run since then.

This, during years when both the UPA and the NDA have been in power.

Data Source: Ace Equity

This Chart Of The Day was published in The 5 Minute WrapUp - The One and Only Stock Picking Strategy to Adopt Post the Exit Polls

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