Low voter turnout means doomsday? 6 reasons why investors are overreacting
Sensex and Nifty and sudden spikes in fear index India VIX, Dalal Street investors have apparently been more worried about voter turnout percentages than earnings growth of India Inc in the March quarter.
«There are an awful lot of doomsayers out there that say that they (BJP) are not going to get 250 (seats) and INDIA (alliance) is going to get the majority. If that happens, then the market is in for a bit of a dive which is why you have got these shorts happening,» says Pashupati Advani, Founder, Global Foray.
Besides speculations coming in from betting markets like Phalodi Satta Bazar, one of the biggest cues for doomsayers is voter turnout percentages.
Voter turnout in the first four phases of the elections has been around 66.9% on a weighted average basis as compared to 69% seen in the first four phases of the previous Lok Sabha elections.
However, analysts are of the opinion that the market could be overreacting to voter turnout figures. Here are 6 reasons why:
1) You are comparing apples with oranges
It's true that voter turnout in 2024 is less as compared to 2019 but the constituencies of this year's first four phases aren't exactly the same as those in the last election.
«Constituencies will inevitably vary in their propensity to vote, which could explain some of the variation in turnout across phases. In the first four phases so far, the 2024 elections have covered more ground in Kerala and Madhya Pradesh, and less ground in Maharashtra and Odisha than the 2019 elections,» Nomura analysts Sonal Varma
