Stock Market: How Elections Affect India’s Share Market and Economy?

14 Oct, 2023 Author: Ayushee Joshi

Share Market News: Elections in India affect the political landscape, the stock market, and the economy. When a new party comes into power, it may change government policies, economic priorities, and regulations. This can affect different organisations and industries in different ways. In the short term, elections can cause the stock market to fluctuate. But in the long term, the economy is more affected by the economic reforms and policies of the ruling party.

The History of Elections and Indian Economy

Throughout the 2019 election, the political situation in India was actively monitored by the stock market. Market fluctuations were brought on by investors' attention to political developments and news. However, Prime Minister Narendra Modi's re-election and the BJP's dominant victory brought stability and continuity, and the market recovered after the election. Expectations of ongoing economic changes and policy consistency under the BJP-led administration drove the rally. The market was thought to benefit from the government’s pro-business plans and policies like ‘Make in India’ and infrastructural development. Investors also appreciated tax reductions, business-friendly regulations, and initiatives to draw in foreign capital.