Lok Sabha Elections 2024: How will they impact financial markets and what should investors do?
The Lok Sabha elections 2024 are set to kick off on April 19 and will continue for the next 44 days before concluding on June 1. This once-in-half-a-decade political event is significant for most Indians since it touches their lives in more ways than one, particularly their savings and investments.
There is no denying the fact that the Lok Sabha polls are an important event when seen through the lens of investing; therefore, they impact people's financial goals – marginally, if not substantially.
There is good news as well as bad. The good news is that financial markets tend to deliver good returns every election year. During the past four general elections, markets delivered double-digit returns. But the bad news is that most of the returns are believed to be factored in this time.
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“If one takes the calendar year returns of Nifty50 in an election year, the Nifty has delivered a double-digit growth in all periods (2004: 10.68 per cent, 2009: 75.76 per cent, 2014: 31.39 per cent and 2019: 12.02 per cent)," says Shiva Subramaniam, COO and Asset Class Expert, Whitespace Alpha.
Experts believe that the financial markets have already factored in the optimism which stems from the expected outcome of the upcoming general elections. So, there is little possibility of too much volatility ahead.
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“Favourable election outcome has already been priced by the market participants. Going forward, market movements are likely to be influenced by the earnings visibility," says Hemang Kapasi, Head of Equities, Sanctum Wealth.
But
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