What to expect from Indian share market on Lok Sabha election result day? Experts shed light

As the countdown for Lok Sabha election results began, market participants are anticipating which way will the Indian benchmark indices head. Lok Sabha election results will be announced on Tuesday, June 4. 

Suman Bannerjee, CIO, Hedonova believes that upper and lower circuits can be triggered on general election result day based on the outcome.

"On June 4, the day of the General Election results, investors should be prepared for significant market volatility, potentially triggering circuit limits on the stock exchange," said Bannerjee. 

Bannerjee added that historical precedents, like the 2009 elections, show that both upper and lower circuits can be triggered based on the election outcome. Additionally, as per the expert, investors can expect potential trading halts if market movements reach the 10 per cent, 15 per cent, or 20 per cent thresholds.

It should be noted that circuit limits, such as those for the Nifty 50 index, are designed to curb excessive price fluctuations and stabilise the market.

Furthermore, Atul Parakh, CEO of Bigul reckons the imminent election results as a real litmus test, likely to drive immediate market sentiment amid uncertainty and volatility as the political landscape unfolds. 

"In the long term, the market hinges on economic reforms, fiscal policies, global dynamics, and corporate earnings growth. While short-term fluctuations are expected, prudent investors should emphasise fundamental analysis and diversification to navigate turbulence and seize long-term opportunities beyond the election's transient impact," said Parakh 

While the market is expected to remain volatile on the Lok Sabha election result day, there are possibilities that Nifty may reach 24,000 in the coming days. 

"Nifty is expected to surpass the 24,000 mark in the coming days after a period of consolidation. This is supported by the attractive valuations in large-cap stocks and the anticipated increase in foreign institutional investor (FII) inflows into the Indian market following the election results," said Santosh Meena, Head of Research at Swastika Investmart Ltd.

Rajesh Sinha, Sr. Research Analyst-Bonanza Portfolio believes that market will be in a positive territory tomorrow on the day of election result, however, volatility can be seen tomorrow depending upon the result trend. Further taking mid-to-long term view, we believe, investors should consider those sectors where new government is expected to be more focussed like, PSUs, Defence, Infrastructure, Railways, etc. On the result day i.e. tomorrow if the exit poll results turn into actual numbers than long-term outlook of the market will be strong.

On Monday, June 3, the domestic blue-chip indices closed on a high note.  Sensex finished 2507.47 points higher at 76,468.78 and Nifty settled at 23,263.9. Broad-based buying was seen across all counters. 

Catch all the highlights of June 3 session on Dalal Street here. For all other news related to business, politics, tech and auto, visit Zeebiz.com.

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