SHARE MARKET AND ELECTIONS : Election is influenced by stocks !

Share Market And Elections Relations !

SHARE MARKET AND ELECTIONS : Election is influenced by stocks !
SHARE MARKET AND ELECTIONS : Election is influenced by stocks !

It is very important to understand how the stock market works before knowing how much impact the elections have on the stock market and how long the effect remains.

 The philosophy of the market is very simple. All its players, which we know as investors, try to make an estimate of the next direction of your market and make profit by putting their capital towards the same direction.

 Now once you understand this thing, it will be easier for you to invest in the election.

Election is influenced by the market in the stock market 3 ways
  • From the first election announcement till the election,                                                                       
  • The direction of the election immediately after the result of the election ,                                          
  • The direction of election results and government formation for next 3 months.
In order to simplify these things we will pay attention in certain scenarios.

If a few up promises are omitted, then with a very good chance before the results of the election can be said which party will come to the government, and such possibilities come up with some scenarios such as: Suppose before the election, the exit Polls, opinion polls show that the government is coming in the absolute majority of a single party - the stock market considers it a very good sign.

 Therefore, you can assume that the market will go up till the election results by announcement of the election and when the results of the election will come, the market will show some degree of decline. You can see this in 2014 with the activities of the market.

The second possibility is that exit polls, opinion polls show that no party will get absolute majority, which is going to be a mixed government, in such a situation, by declaring the election, election results can be assumed that the market Going downwards and after the election results, it will be seen handling some extent after forming a government.

Now, when we become the government of a certain party, we will look at the emerging scenario.

 Suppose that being a government of a party is almost certain, the market will go up, but those companies whose shares are going to gain more than coming into power will go somewhere faster.

for example, suppose that the party whose power It is more likely that the Manifesto of that party is written that they will make the policies related to electricity more intensified when they come into government so that they can go to power sector.

To attract investment over Ada shares of power companies in this case would be up to much faster than other companies |

Now we will pay attention to this scenario after coming to power in the same party.

 As we had assumed that stocks of power generating companies would go up, but the word is no longer the word because the party has come to power, therefore more importance than words will be of karma, that is, if the government promises to make promises According to the rules of investment in the electricity sector does not make it easy, then the stocks of all the companies that went up faster will come down as fast as possible. By doing it in the words of the market, on a regular basis on cell-on-news.

Now we will discuss the scenario where there is a possibility that there is a possibility of not forming a single government of a single party but a mixed government.

In the event that we have already talked about the announcement of the election of the election, it will go down till the results of the election, but after that we know that the importance of words will be eliminated and the importance of the deeds will be increased i.e.

 If the government does any good work then the markets will perform better than expected, They will not only get their lost land but will get new heights, the best example is the government of the United Front formed in the 90's.

Although politically it is believed that these governments were very weak but at the same time it is also believed that P Chidambaram presented two dream budgets in that period and since the market is less hopeful than the combined government So the good news is as good as the good news.

Before concluding this article, we will talk of a final scenario which is related to the ideology of political parties. Suppose there is a possibility of coming to the government of a party which is considered a left wing.

In such a situation, the announcement of the market will keep its stand down till the results of the election, because the left wing would have a figure of thirty-six Is there.

 If there is a possibility of such a party coming to power which is considered to be right wing, then the announcement of the election of the market will keep the direction till the results of the election.

 As we know that the market tries to explore the possibilities of coming things and puts its capital on the same side, the importance of words ends after the election results, and then the work done by the government becomes important Are.

In this entire article we have talked about short-term or short term. The direction of the market in the short term relies heavily on the results of the election.

If the results of the stock market are viewed from a long term or long-term perspective, there will be no impact of the election.

This is an important thing - investors who invest for a longer period of time, there is no need to worry about the election and its results. We will show this thing with figures in a separate article.

thanks for the time . 

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