Lok Sabha Elections 2024: Lok Sabha elections and the stock market have a deep relationship with each other. As soon as the elections are announced, the market reacts to it, which leads to fluctuations. Something similar is happening this year as well.
In 2014, the Lok Sabha elections were held in 9 phases from 7 April to 12 May and the results were declared on 16 May. Before the elections began, a big jump was seen in the market. Nifty was at 6,041 points on 10 February, which reached 6,776 points by 7 April. During this period, the Sensex increased from 20,414 points to 22,628 points. In the next three weeks from 7 April to 28 April, Nifty remained in a limited range of 200 points and Sensex remained in a limited range of 500 points. From 28 April to 19 May, the market once again saw a big jump. Nifty reached 7,367 points. During this period, the Sensex also reached 24,693 points.
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Like 2014, there was turmoil in the market during the 2019 Lok Sabha elections
Lok Sabha elections 2019 were completed in seven phases. The first phase of voting was held on 11 April while the seventh phase of voting was held on 19 May. Its results were declared on 23 May. Before the start of the election, a big boom was seen in the market. Nifty rose from 10,738 points on 18 February to 11,752 points on 15 April. Sensex also rose from 35,820 points to 39,140 points in the same period. During the voting, the market saw a decline for the next three weeks from 15 April to 6 May. During this time, Nifty fell to 11,278 points and Sensex to 37,462 points. But the market returned to boom again in the next three weeks i.e. till 27 May, due to which Nifty came to 11,922 points and Sensex to 39,714 points.
India VIX index increases during elections
During Lok Sabha elections, India VIX, which shows the volatility in the market, sees a significant increase. In 2014, India VIX started increasing 22 days before the elections. Whereas, in 2019, this trend was seen 35 days before it.
This year, the market had gained momentum before the elections
This year, voting is being held in 7 phases from 19 April to 1 June. Its results will be declared on 4 June. This year too, the market witnessed an initial rise before the elections. Nifty was at the level of 21,839 points on 20 March, which reached 22,753 points on 10 April. During the same period, the Sensex rose from 72,101 points to 75,038 points. After this, the market declined and by 18 April, Nifty and Sensex slipped to 21,995 points and 72,488 points respectively. Since then, Nifty is trading between 22,750 points and 22,800 points and Sensex is trading between 72,000 points and 75,100 points.
