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Below the Quote on Market by Alok Jain, smallcase manager and founder, Weekend Investing

“A big move is always expected around big events. Elections are the biggest event for India markets every 5 years. This time it was even more interesting given that a strong leader is contesting for a third term fighting anti-incumbency and only once in the past 75 years has this feat been achieved of three consecutive terms. However the markets have been extremely positive. The indices in the past 6 months in the anticipation of the new govt offering continuity in reform risen nearly 20%. The exit polls over the weekend have bolstered the expectation of the current govt sweeping the polls again.

In the history of past election day moves, in 2009 the markets hit upper circuit on a surprise win, in 2014 markets ran up nearly 10% before election result day and in 2019 also a few days of good run post results ensued. This time the markets ran up from Nov to Feb but consolidated largely since then. If there is an outcome of continuation which the market is sensing on Monday a lot of funds sitting on the sidelines can continue to pour in, tremendously large FII short positions that have been built can over time be unwound and expectations of new measures in the first 100 days can keep the ball rolling.

There is little chance that this markets will roll back unless the outcome on June 4th is not per expectation. There is an outside chance that the actual results may infact be even more strong than the exit polls as has been seen in the last 3 election exit polls where final numbers were far more extended in the direction of the stronger swing. All in all markets are putting their faith into the leadership with a great potential for India to emerge as fast growing strong and stable nation.”

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