/financial-express-hindi/media/media_files/e4RBkC5eldq0jIgBz3n3.jpg?w=1200&resize=1200,675&ssl=1 "Market mood in the last 4 election years, how was the condition of Nifty 50 before and after the results?")
Share Market Month Wise Trend in Last 4 Election Years: There are only a few days left for the results of the Lok Sabha elections to be announced. After the counting of votes on June 4, the results of the general election (General Election 2024 Result) will be revealed to everyone. Before thisIn the last few days, the Indian stock market has seen sharp fluctuations. During this time, we have seen the market touch new heights and there has also been profit booking. This movement in the market is being linked to the election environment. It is generally believed that the stock market likes political stability and starts getting jolted by the possibility of change in power. Amidst these discussions, it will be interesting to see how the stock market has performed in the election year during the last 20 years. What has been its mood during the voting and immediately after the announcement of the results?
To know the answer to these questions, let’s take a look at the Nifty 50 data in the last 20 years i.e. in the year of Lok Sabha elections held after 2004. During this period, 4 Lok Sabha elections have been held in the country – in 2004, 2009, 2014 and 2019. So let’s see how the Nifty 50 has moved month-by-month during these four calendar years:
Nifty 50 returns in previous election years (in percentage)
| 2004 | 2009 | 2014 | 2019 | |
| January | -3.72 | -2.85 | -3.4 | -0.29 |
| February | -0.52 | -3.87 | 3.08 | -0.36 |
| march | -1.58 | 9.31 | 6.81 | 7.7 |
| april | 1.37 | 15 | -0.12 | 1.07 |
| May | -17.4 | 28.07 | 7.97 | 1.49 |
| june | 1.48 | -3.55 | 5.28 | -1.12 |
| july | 8.42 | 8.05 | 1.44 | -5.69 |
| august | -0.03 | 0.55 | 3.02 | -0.85 |
| september | 6.97 | 9.05 | 0.13 | 4.09 |
| october | 2.37 | -7.32 | 4.49 | 3.51 |
| november | 9.62 | 6.81 | 3.2 | 1.5 |
| December | 6.21 | 3.35 | -3.56 | 0.93 |
| Annual Returns | 10.68 | 75.76 | 31.39 | 12.02 |
(Source: Prime Investor)
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The returns have been positive in the last four election calendar years
The above figures show that the annual return of Nifty 50 has always been positive in the last four election calendar years – i.e. 2004, 2009, 2014 and 2019. In 2004 it was 10.68%, while in 2009 a tremendous return of 75.76% was seen. After this, in 2014 also Nifty gave a great annual return of 31.39%. After this, in 2019 also the annual return of Nifty was 12.02%.
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What do the statistics of election years tell us?
The Nifty 50 data given above shows that one thing is common in the stock market trends during the last 4 election years, and that is that from 2004 to 2019, there has been a decline about 3 months before every Lok Sabha election, i.e. in January. Whereas Nifty has given positive returns 6 months after the election, i.e. in the month of November. According to these figures, Nifty 50 declined by -3.72% during January 2004, -2.85% in January 2009, -3.4% in January 2014 and -0.29% in January 2019. If we compare it with the current election year, the return of Nifty 50 in January 2024 was 0.03% i.e. almost flat.
On the contrary, the market trend in November has been positive during the last four election years. Nifty 50 gave a positive return of 9.62% in November 2004, 6.81% in November 2009, 3.2% in November 2014 and 1.5% in November 2019. The month of December has also been good in most election years. During the last four election years, only in 2014 the December return was -3.56 i.e. negative. Talking about the rest of the election years, it was 6.21% in December 2004, 3.35% in December 2009 and 0.93% in December 2019.
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How was the market trend in May-June
If we look at the trend of the month of May in all the four election years, the trend in the returns of Nifty 50 has not been the same. In 2004, the return of May was -17.4% i.e. negative, while in 2009 it was 28.07% with a good increase. At the same time, in the month of May 2014, Nifty 50 saw a rise of 7.97%. In 2019, the return of Nifty 50 was 1.49%. Talking about May 2024, according to the data of 29th, the return of Nifty in the last 30 days has been 0.44%. Talking about the month of election results i.e. June, Nifty gave a return of 1.48% in 2004, -3.55% in 2009 and 5.28% in 2014. At the same time, this return was -1.12% in 2019. That means, in the month of June, Nifty’s return has been positive in two out of four years and negative in two years.
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Improvement came after the formation of new government
Nifty data during the last 4 election years shows that the market mood has generally improved after the results of the general elections. If we look at the data from June to December after the elections, we can see an interesting trend. If we combine the trends of these 7 months for all the four election years, then Nifty’s return has been negative only in 7 out of 28 months. During the remaining 21 months, the market mood has been positive. That is, the market mood has generally been good after the elections.
