Amit Shah shares stock market tip: Buy before June 4 counting day

When asked whether the market will hit a new high after elections, he said: "I can't do an analysis of the stock market but normally whenever there is a stable government, the stock market goes up. This time we are going to get more than 400 seats and a steady Modi is coming back. So the market will go up for sure."

A lower voter turnout in the first three phases of the has increased perceived uncertainty on the outcome, even if the consensus is still firmly rooting for a return of the incumbent, market insiders say.

The impact of the nervousness is also being felt on elevated levels of India VIX, which indicates that traders are expecting heightened volatility ahead. India VIX has jumped over 60% so far this month to hit a fresh 52-week high of 21.49.



Market insiders expect volatility to continue for the next three weeks. "The on June 1 will also not give any kind of substantive relief to markets. Only when the major trends would be known in the market by June 4 afternoon is when investors will finally settle down," said market expert Ajay Bagga.

On average, nationwide voter turnout looks to have dropped by around 3-4 percentage points from 2019, while in general most states also showed a drop in voter turnout.

"This development has led to some modest jitters among market participants that lower voter turnout may be a harbinger of anti-incumbency and could work against the BJP’s favour this year. Nonetheless, the most robust academic literature generally points to

no clear relationship between overall voter turnout and anti-incumbency in India's elections historically," Michael Wan of said.

Data since 1951 suggests that there were eight times an incumbent government lost, and this sample was equally split between increases and decreases in overall voter turnout rates.

"For now, we emphasise that it is very difficult to draw exact conclusions around the impact of lower voter turnout on the Election outcome. This will probably become clearer later with deeper analysis on which groups turned out to vote," Wan said, adding that the short-term market impact of the elections will depend on the strength of government mandate relative to polling expectations.

Sharp movements after the elections happen only when the poll results are totally unexpected. "This happened after the 2009 elections when the UPA government got a thumping victory and the market set a record, hitting the upper circuit twice," said Dr. V K Vijayakumar of .