Is Delhi election affecting the Markets? We say No!

12 Feb 2020

Whenever there are any major elections, financial markets are bound to react to it. Stock Markets love stable governments with a very clear decisive approach to things. It helps those industries and companies grow which are operational in the territories where the elections are occurring.

So, coming to Delhi, it’s the national capital and has a lot of companies which are listed on the markets and are based in Delhi and drive their businesses at the state level. Any change in governance there would undoubtedly affect the companies operating in that region.

The Delhi Polls Saga

The voting in Delhi was conducted on 8th February 2020 and the counting of votes was done on 11th February 2020. There are a total of 70 legislative assembly seats for which the voting was conducted in one phase out of which, 62 are conquered by the Arvind Kejriwal led Aam Aadmi Party (AAP) and the remaining 8 by BJP.

There wasn’t much difference between the results of the elections and the opinion poll. However, BJP definitely was able to increase its count from 3 in the last election to 8 in this election, whereas Kejriwal’s party closed the election with 62 seats.  

What does the Verdict mean to the Markets?

Since this had been a very anticipated move, the country’s stock markets did not react much to it. The stock markets continued trading as usual as the results did not bring any shocker for them. The reason for volatility now only remains to be the uncertainty due to the Coronavirus outbreak.

In the last elections AAP had formed a very stable government and had propelled a positive sentiment among the market players. While last election AAP was able to win 67 seats out of 70, it was next to impossible for AAP to achieve the same feat this time. However, the count of 62 seats wasn’t disappointing either and indicated to the formation of a very stable and drama-free oath taking ceremony of the Chief Minister Arvind Kejriwal.

How Did the Market Really Perform on the Result Day?

On the day of counting, i.e. 11th February, the Nifty had opened with a gap up after two days of sell off. The markets gave a closing above the level of 12100 level. However, the market was still in favor of the sellers. On Tuesday, NSE saw about 962 stocks closing at a negative and 801 shares closed in the green.

On the Corona Virus side, experts are claiming that the pressure on the indices will continue for some days. However, there are some positive news coming up which are cheering the markets. The restarting of some Chinese companies has given some positive signals for the global economy. Due to the Coronavirus, over 1000 people have died and more than 12000 have been infected by the same. There is no need to panic though. You can protect yourself from the Corona Virus by following basic safety measures and protocols.

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