Lok Sabha Elections 2024: Historical Analysis Of Stock Market From 2004 To 2019 As Exit Polls Trigger Record High Performance

After intense campaigning in the scorching heat by parties and candidates outlining their agendas and promises, the Lok Sabha elections 2024 have finally concluded. After two months of voting in seven phases from April 19 to June 1, the final phase of voting ended on Saturday, June 1.

The exit polls were released on Saturday evening immediately after the conclusion of final phase and the lifting of ban by the Election Commission. Polls by major media outlets and agencies predict that the BJP-led NDA government will win a majority and form the government for the next five years.

Following these predictions, the Indian headline indices, BSE Sensex and NSE Nifty have started to react as the nation eagerly awaits the official election results on June 4, one of the biggest events of the year.

The stock market on Monday, June 3, after the weekend break, opened on a positive note with both the major indices in green, hitting a fresh record high driven by the exit polls predictions released on June 1. The BSE Sensex opened at 76,529.50, surging by 2568.19 points. Meanwhile, NSE Nifty surged by 23,109.40 points, rising by 578.70 points. Additionally, the Nifty Bank was trading at 50,382.05, up by 1,398.10 points.

If seen sector-wise, the major stocks were trading in green during intra-day. From the Sensex pack, the major gainer during the intra day trading is PowerGrid, up by 10.28 points, followed by SBI, 9.19 points, NTPC, LT and UltraTech Cement.

As the nation awaits for the official result on June 4, let’s take a historical analysis of how the Indian stock market reacted on the past four Lok Sabha Elections result spanning from 2004 to 2019.

1. Lok Sabha Elections 2004

In the 2004 election result, the Indian National Congress (INC) led United Progressive Alliance (UPA) had a surprising victory over the incumbent Bhartiya Janata Party (BJP) led National Democratic Alliance (NDA). The INC won 145 seats compared to the BJP’s 138 seats. During the election period - from April 20, 2004 to May 10, 2004, the BSE Sensex fell by 4.2 per cent.

On the final counting on May 13, 2004, the market grew over by 0.8 per cent as the initial result started coming in. The Sensex opened at 5,234.51 on the counting day, went high at 5,486.04 and low at 5,131.03. The Sensex closed the counting election day at 5,399.47.

Post the election result, on May 17, after the unexpected change in the government, the BSE Sensex plunged by over 11 per cent, triggering a temporary halt in trading as market feared due to concerns regarding new coalition’s economic policies.

2. Lok Sabha Elections 2009

The 2009 again saw the INC led UPA government retaining to power. The INC secured 206 seats and the BJP got 116 seats. During the election period from April 16 to May 13, 2009, the BSE Sensex rose 6.5 per cent and on the first day after the counting, as market was closed on the final counting day, the Sensex surged 17.3 per cent. Moreover, trading was halted twice due to circuit breakers.

The stock market was closed on the counting day, May 16, 2009. On May 18, the first market open after the election result, the BSE Sensex opened at 13,479.39 and closed at 14,284.21.

3. Lok Sabha Election 2014

The 2014 election was another biggest event in the electoral history. This was the first time in 30 years that a single party achieved a majority by its own. The BJP-led NDA, with Prime Minister Narendra Modi secured a majority of 282 seats whereas INC got only 44 seats.

Sensex grew by 5.3 per cent during the election period from April 7 to May 12, 2014. On the counting day, May 16, the BSE Sensex ended the day at 1 per cent higher as results confirmed the BJP’s victory.

Both the headline indices surged to record highs, in the lead-up to and following the election results. The Sensex opened the day at 24,271.54 and went high at 25,376 during the trading hours. The market closed the day 24,121.74.

4. Lok Sabha Election 2019

The BJP led NDA resounded another victory in 2019 election, with even larger majority for the party compared to previous 2014 Lok Sabha elections.

The BJP won 303 seats and the INC managed to secure only 52 seats. From 11 April to May 19, 2019, the BSE Sensex fell by 1.7 per cent.

On the counting day, on May 23, 2019, the market fell marginally by 0.8 per cent as the results confirmed BJPs retain to power. The immediate reaction of the result was the stock market reacted positively to the continuity of the government although not as strongly as in the previous elections.

The BSE Sensex on the 2019 counting day opened at 39,591.77 and went high during the trading at 40,125. The market closed the day with a decline at 38,811.39.

As the nation eagerly awaits the official results of the Lok Sabha Election 2024 tomorrow, June 4, with the current exit polls predicting BJP-led NDA government another victory, will the market sustain its bullish trend following the official results, or will it see unexpected fluctuations? The answer to this will unfold as the final votes are counted tomorrow.