Indices Sink Amid Low Polling: Are Markets Unsure About Lok Sabha Results?

Indices Sink Amid Low Polling: Are Markets Unsure About Lok Sabha Results?

The BSE sensex ended the day 1,062 points below to close at 72,404 points. The NSE Nifty did not fair any better, as it slipped 345 points to close at 21,957 points.

Juviraj AnchilUpdated: Friday, May 10, 2024, 10:24 AM IST
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Representative Image | File photo

The 2024 Lok Sabha election started with much fervour and visible exuberance. But as we progress towards the fourth phase of the seven-phase-long election on May 13, that jubilance appears to have turned lukewarm in the scorching heat of the summers.

This ostensible dearth of intensity appears to hit the stock markets as well. The marquee Indian indices, which had a relatively uneventful week, stumbled like a deck of cards on Thursday, May 9. For context, the major indices dropped by over 1 per cent. The BSE sensex ended the day 1,062 points below to close at 72,404 points. The NSE Nifty did not fair any better, as it slipped 345 points to close at 21,957 points. In addition, Nifty Bank also dropped by 533.20 or 1.11 per cent.

This development is being attributed by analysts to the low voter turnout and a palpable uncertainty, that is perhaps creeping into the discourse.

This development is being attributed by analysts to the low voter turnout and a palpable uncertainty, that is perhaps creeping into the discourse. | File

Low Voter Turnout Irks Market?

This development is being attributed by analysts to the low voter turnout and a palpable uncertainty, that is perhaps creeping into the discourse. Although, no pollster or neutral analyst is predicting a shake-up and a change in regime, that is, the BJP being voted out of power, concerns are perhaps growing in the market regarding the BJP's numbers that would tally up on June 4.

The voter turnout in the first phase of the election stood at 66.14 per cent, the turnout stood at 66.71 per cent in second phase. And according to the latest data from the poll body, the turnout for the third phase stood at 65.68 per cent.

Although the gross number of voters turning out has increased, the percentage of the voters who end up casting their vote, compared to the total number of individuals who are eligible to vote is low. It should be noted that nearly 100 crore Indians are eligible to vote in these elections.

This apparent low turnout, and the subsequent change in political rhetoric from the ruling party, and its top leadership is being seen as an indication of some certainty over uncertainty. Some expect the numbers for the BJP-led NDA to lower than, what was initially anticipated. For historical context, the markets have often positively reacted to stability and particularly the BJP's performance in the elections. May it be 2014 or later in 2019.

The voter turnout in the first phase of the election stood at 66.14 per cent, the turnout stood at 66.71 per cent in second phase. And according to the latest data from the poll body, the turnout for the third phase stood at 65.68 per cent.

The voter turnout in the first phase of the election stood at 66.14 per cent, the turnout stood at 66.71 per cent in second phase. And according to the latest data from the poll body, the turnout for the third phase stood at 65.68 per cent. |

Political Stability Is Paramount

And since political stability and subsequent consistency in policymaking are the conducive path for any and every business, it is perhaps a natural progression, when jitters are felt. It also needs to be noted, that there has also been a minor exodus of FIIs, who have been withdrawing from the market. In fact, Foreign portfolio investors (FPIs), have cumulatively sold stocks worth Rs 8,671 crore during April.

After the bloodbath, the markets opened in a relatively less turbulent mode, as Sensex, Nifty, and Nifty Bank are all trading in green, indicating a slow recovery.

Here, at 09:40 IST, Nifty was trading at 22,041.25, gaining 83.75 points, or 0.38 per cent. Nifty Bank was at 47,603.00, after gaining 115.10 or 0.24 pe rcent. Meanwhile, Sensex also gained 263.75 points, or 0.36 per cent, to reach 72,667.92.

The seven-phase-long Lok Sabha elections will conclude with results, that will be declared on June 4.

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