Impact of India Election Results 2009 on Indian Stock Market

Impact of General Elections 2009 on Indian Stock Market

Indian Stock Market deeply follows two set features of New Delhi circus- the budget and the general elections. This time is no exception. While recession has deeply affected the global economy and those who are given the best deals are also in relative tatters, general elections in India would not have any less profound impact on the Indian economy. Here is hoping that a big number of positives come out instead. Having said that, a rational study of the electoral mandate only seems logical.

In fact, Morgan Stanley believes that the outcome of elections would only be second to the global recession in terms of impacting the country.  The institutions deem the poll results to be ahead of fiscal policies and corporate basics in unleashing a change in financial dynamics.

According to people in the know, roughly 10000 crore rupees would be spent on the general elections and it would bolster the stock market. Many are on a consensus that if somehow a business and reform-friendly coalition can make its way, then there would be no dearth of stock market bounties. In this regard, nothing can work out better than a single party majority. It has been witnessed many a times that reforms have been impeded by retrograde forces teaming up for a coalition government.

Normally pleasant fallout of the general elections would be higher liquidity that in any event is set to boost the stock market. It surely would be an aid in revival of the plastered economy. Theorists agree that victory for congress and BJP would be in favor of the stock market while Left front or a third party coalition would adversely affect the growth of the market.

Stock markets are furiously swirled by the momentum gathered through the outcome of general elections. It has been seen in the past. Perhaps it has to do with privatization, infrastructure boost and the lack of it. A reform-averse political group would impede structural reforms and hit the blue chip companies hard. It would be true for other stock units too.

It is noticeable that global market and FDI pool is bound to swell at the smell of a favorable mandate in Indian elections. In contrariety, it would be a gathering of cynics in the world corporate ring, once India suffers a fractured mandate. In essentiality, any such mandate would represent a higher risk for FDI investors.

World is fast moving towards anti-capitalism. Assets are being nationalized at an expeditious rate. There are plenty of religious and political turmoil. Pakistan remains a crux issue. Nuclear questions and defense sentiments are on a high. In such a time, there can be ramifications beyond reprieve. However, the general election has to be an answer to the political dilemma and here is hoping that the victor does not bleed the country further.

Stock market is an index, the reflection of our financial strength and people of India are anticipating a surge in its numbers post this election.

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