With markets tumbling like nine-pins since the past few months on global and domestic issues; and the economy gasping for breath; there has been a growing chorus that the fortunes are likely to change post the General Elections (scheduled for 2014) and formation of a new Government.
In two out of past three occasions, the Bombay Stock Exchange has recorded a gain of over 50% during twelve-month period before the Lok Sabha elections.
Except the last General Elections held in 2009, the benchmark index had surged 61% in 1999 and a whopping 93% in 2004 during one-year prior to elections, data compiled by Business Standard Research Bureau shows.
Five stocks from the BSE-30 Sensex companies, Tata Motors, Mahindra and Mahindra, Hero MotoCorp, Hindalco Industries, Larsen and Toubro and Sun Pharmaceutical Industries appreciated more than 100% in both these years.
However, in the year the market did not rally before the elections, it rallied after the elections!
In 2009, while Sensex declined 33% before elections, it rallied 61% in next one-year after the new Government took charge.
Text: Puneet Wadhwa and Deepak Korgaonkar, Business Standard
Cartoon: Satish Acharya