Volatility Expected For Indian Rupee and Equities

If history is anything to go by, equity investors in India are in for a wild ride in the days and months following the general elections which conclude on May 16.

Following the most recent election in 2009, when the Indian National Congress (INC)-led coalition won an overwhelming victory, the benchmark S&P BSE Sensex returned 20.5 percent in the five days after the election. By contrast, in 2004, when the Bharatiya Janata Party (BJP) lost the elections, the index declined 16 percent in the five subsequent days.

“Past experience shows that elections can be harbingers of significant post-election volatility,” Nomura strategists led by Prabhat Awasthi wrote in a report on Tuesday.

However, in the months after the elections, the market ultimately tends to reflect economic realities, notes Awasthi.


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Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu