Market mantra for 16 May: stay calm

Avoid taking decisions in haste and based on sentiment

The stock market has gained 6.58% since Friday, 9 May, and is expected to go up further if the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) comes to power on 16 May. The exit poll results, which were released on 12 May, also indicated in this direction. However, it is important to note that such polls have been proved wrong in the past. Therefore, depending on the tally, markets can swing either way on the results day.

In 2004, when the NDA lost unexpectedly, markets fell over 16% within days of the results being declared. In 2009, when the Congress party-led United Progressive Alliance came back to power with a bigger mandate, markets went up over 17% in a single day.

The recent rise in the stock market and the buildup of expectations around election results indicate that there will be plenty of action in the market on the result day.

If the results are in line with market expectations, it is highly likely that there will be euphoria on the street. So, if you have been waiting for results and missed the rally, should you join the bandwagon on 16 May? Not necessarily.

NITESH KUMAR SINGH

PGDM 2ND

SOURCE-- MINTLIVE NEWS