Indian stocks tend to reward investors post polls, history shows

economictimes.indiatimes.com:

Indian stocks have turned volatile ahead of election results due next week, but if history is any guide the outcome makes little difference to long-term investors.

The S&P BSE Sensex Index gained in the six-month period after voters’ verdict in each of the last five elections, giving a median return of over 11%. While the market has mostly priced in a victory for Prime Minister Narendra Modi’s party, market participants expect his party to better their previous seat tally of 303 seats to extend stock gains.

The voting comes to an end on June 1 and the final result is expected on June 4. As the process reaches its last leg, a gauge of 30-day implied volatility on the National Stock Exchange Ltd. has more than doubled from a low in April, while stocks touched a new high last week.

The SENSEX Index rose 0.2% on Friday, helping trim monthly losses to about 0.6%.
“There is room for upside if foreign flows, which have been weak this year, improve after elections and volatility declines similar to prior election cycles,” Goldman Sachs analysts wrote in a note.