Expert view: Unexpected election outcome could disrupt Indian stock market, says Trivesh D. of Tradejini

livemint.com:

Trivesh D., Chief Operating Officer at Tradejini, believes the 2024 general election outcome may not greatly influence the stock market in the short run. However, the long-term impact could be significant. He said if the election outcome is unexpected, it could cause market disruptions, which could be short-lived.

In an interview with Mint, Trivesh shared his views on sectors he is positive about and why investors should invest in bonds too. The results of the 2024 general election are unlikely to greatly influence the stock market in the short run, although the long-term impact could be significant. Thematic-based investments have taken the forefront with the government and most fund managers advising on a broader bet than individual stock picking.

The recent bull market has largely been driven by confidence that the incumbent party will remain in power, along with the phenomenon of election rallies. Election years are usually good for financial markets, with the past four general elections showing double-digit returns. Adding to that, much of these gains, predominately in the small and mid-cap stocks, might already be factored in ahead of the current election, indicating that the market's potential for further gains may be limited as the election outcome draws closer.

Further, the large-cap stocks have seen muted or moderate returns and may see some movement after the elections with political certainty for the next five years. However, if the election outcome is unexpected, it could cause market disruptions, as seen in previous instances. Still, these are likely to be short-lived, with recovery expected once the election fever is erased and normalcy is resumed.