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The Sensex And The General Elections


Sensex Before The Polls

Much has been made of the current rally in the SENSEX,which is generally explained as anticipation of a Modi win.However,compared to the earlier elections in 1999, 2004 and 2009,the rally in 2014 has been much less spectacular,as you can see by following the black line.

Also more volatile markets were seen in both 1999 and 2004- the green and blue lines.

Interestingly,speculators start reacting more sharply in the last couple of weeks before counting gets underway.In 2004.when the markets were seen as anticipating a BJP win, like today,it had already began trending down in the days leading to the vote count.

Predicting the outcome of the elections is itself less than an exact science.So too is predicting the stock market movements.So leave such predictions to the insiders if you wish to safeguard your capital.Or become an insider before you speculate,if you are inclined that way.

 

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About Keerthika Singaravel
Engineer,Investor,Businessperson

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