Nifty 50 is up 1% this year so far; can it see a pre-election rally?
Lok Sabha elections: India to go to polls starting 19 April Experts say the next major trigger for the domestic market is the outcome of the General Elections 2024. The Nifty 50 typically exhibits upward momentum in the months surrounding a general election, despite volatility in the market.
Apurva Sheth, Head of Market Perspectives and Research at SAMCO Securities underscored that over the last 40 years, India has witnessed 11 general elections. The average return given by the Sensex of the prior six months to the election outcome during all these elections has been 14.3 per cent.
Sheth further highlighted that in the last 25 years, there were five general elections and during these elections, the Sensex has always given positive returns. This time the election results will be announced on June 4, 2024, so if we take the prior six months, the period begins from December 5, 2023.
During this period, the Sensex has yielded 5.28 per cent to date, so we are still way below the average returns that Sensex has delivered in the prior six-month period in an election year on the last 11 occasions, Sheth observed. Also Read: Expert's View: A 10-15% correction may be healthy; stick to high-quality private banks: Varun Fatehpuria Sheth believes the movement of US bond yields will be a significant factor which will influence the domestic market.
“If the US Bond yield stays below 4.335 per cent levels, we may see further upside in the benchmark in the form of a pre-election rally," said Sheth. Also Read: Fed signals three rate cuts this year; how will it impact equities and gold? Experts weigh in The rally may be led by the large-cap stocks here on as small-cap stocks have corrected about 10 per cent from their all-time highs and are
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