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Election Result Day and Market Volatility: A Historical Perspective

30 May 20246 mins read by Angel One
This article examines the impact of Indian general elections on stock market volatility, focusing on past trends and upcoming expectations for 2024.
Election Result Day and Market Volatility: A Historical Perspective
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As India braces for the results of the Lok Sabha Election 2024, market volatility has surged, with the India VIX index touching an weekly high of 26.1950 , a significant rise of nearly 95.73% in just one month. The anticipation surrounding the election results has kept the Indian stock market on edge, resulting in a weak trading streak. The Nifty index opened with a downside gap today and currently trading at an intraday low of 22,544.25, marking a loss of over 388 points across past three consecutive sessions.

Several factors are contributing to this instability, including the uncertainty before election results, rising US Treasury yields, geopolitical tensions in the Middle East, the monthly expiry of futures and options contracts, and diminishing hopes of a US Federal Reserve rate cut.

Looking back at the historical data since 1999, the impact of election results on market volatility and indices is evident. The period between the announcement of the election schedule by the Election Commission and the counting day typically sees heightened market activity.

Election Start date Election End date Results Date Elected Party Nifty Volatility Nifty Change (Same or Next day)
Sep 05, 1999 Oct 03, 1999 Oct 06, 1999 NDA 3.09% 1.06%
Apr 20, 2004 May 10, 2004 May 01, 2004 UPA 3.27% -1.64%
Apr 16, 2009 May 13, 2009 May 16, 2009 UPA 19.37% 17.74
Apr 07, 2014 May 12, 2014 May 16, 2014 NDA 6.08% 1.12%
Apr 11, 2019 May 19, 2019 May 23, 2019 NDA 3.63% -0.69%
Apr 19, 2024 Jun 01, 2024 Jun 04, 2024 TBD

1999 General Elections

The election cycle from September 5 to October 3, 1999, concluded with the results announced on October 6, 1999. The National Democratic Alliance (NDA) was elected, and the Nifty index experienced a volatility of 3.09%, with a modest index change of 1.06% on the day following the results.

2004 General Elections

During the 2004 elections, from April 20 to May 10, results were declared on May 13. The United Progressive Alliance (UPA) emerged victorious unexpectedly, defying analysts’ expectations. This led to a significant market crash, with Nifty volatility at 3.27% and a decline of 1.64% in the index.

2009 General Elections

The 2009 elections, held from April 16 to May 13, resulted in the UPA retaining power, with the results announced on May 16. This period saw a remarkable market rally, reflected in an unprecedented Nifty volatility of 19.37% and an index surge of 17.74% on the first trading day after the results. The positive market sentiment was partly due to India’s rapid recovery from the 2008 financial crisis, buoyed by the government’s fiscal stimulus.

2014 General Elections

In the 2014 elections, from April 7 to May 12, the NDA was elected with results announced on May 16. The Nifty index showed a volatility of 6.08% and an index change of 1.12%, with markets performing well in the run-up to the elections.

2019 General Elections

The 2019 elections, spanning from April 11 to May 19, saw the NDA being re-elected, with results declared on May 23. Despite global slowdown concerns, the Nifty index displayed a volatility of 3.63% and a slight decline of 0.69% in the index.

Current Market Sentiment Ahead of 2024 Elections

The current election cycle, from April 19 to June 1, 2024, with results due on June 4, 2024, has already seen significant market turbulence. The India VIX index’s recent spike highlights investor anxiety ahead of the election results. The stock market’s recent performance—marked by consistent losses over five consecutive sessions—underscores the nervousness among investors.

Factors Influencing Market Volatility

Several key factors are influencing the current market scenario:

  • Election Uncertainty: The lack of clarity on the potential election outcome creates a cautious environment for investors.
  • Rising US Treasury Yields: Higher yields indicate an expectation of tighter monetary policy, which can impact global capital flows and investor sentiment.
  • Geopolitical Tensions: Ongoing conflicts in the Middle East add to global uncertainty, affecting market stability.
  • US Fed Rate Cut Hopes: Diminished expectations of a rate cut by the US Federal Reserve can affect market liquidity and investor confidence.


The historical analysis of India’s general elections reveals a consistent pattern of heightened market volatility around election result days. The upcoming 2024 Lok Sabha election results are expected to continue this trend, influenced by both domestic political uncertainty and global economic factors.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.

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