Stock market people will get tired after June 4 election results, says PM Modi

“We started our journey from 25,000 () and have reached 75,000. This increases our pride in the world. As more ordinary people come to the market, the economy will gain a lot of strength. I want the risk-taking capabilities of citizens to increase,” Modi said.

While giving the example of the rally in PSU , he said look at Hindustan Aeronautics () which is on a "stellar run" as its stock reached a record high on massive profits.

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Earlier last week, when lower voter turnout had made investors speculate that Street favourite may win lower-than-expected seats, Union Home Minister and top BJP leader Amit Shah had tried to calm investors to buy the dip.

"The has witnessed bigger dips than this one. It should not be linked to the . Anyways, rumours may have happened. You can buy before June 4, it (the market) will shoot up," Shah had told NDTV a week ago.

When asked whether the market would hit a new high after the elections, Shah had said: "I can't do 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 government is coming back. So the market will go up for sure."

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Last week, Sensex ended over 1,300 points higher but wild swings have been becoming more common these days with fear gauge India VIX jumping nearly 60% so far in the month. FIIs, however, have been playing it safe by buying relatively cheaper Chinese stocks and selling Indian stocks worth about Rs 28,000 crore.

"Markets have been nervous from the past couple of weeks and sustained in the run up to June 4 seems likely. Fear around a repeat of UPA victory in 2004 is making markets nervous as the unexpected event had resulted in a 15% cut in Sensex in a single day," said Amnish Aggarwal of .

As the is largely discounted and factored in the market price, the possibility of positive surprises is less and any downside surprise is higher, says Viraj Gandhi, CEO, .

"For investors, assuming that a particular political party comes to power, little may change as it's largely factored into market prices. Their individual goals will hold more significance, and additional savings will likely be invested with a long-term perspective, where the outcome of the upcoming election will have minimal impact on the overall strategy," Gandhi says.

However, historical trends suggest that election results' impact on the market does not last beyond six months and the market continues with its inherent trajectory based on fundamentals.

"Hence, we would not try to time election outcomes and rather focus on stock picking while reducing risk in the portfolio to navigate the volatility due to election outcomes. Structurally we are positive on the economy and markets and would prefer more bias towards large cap companies where the risk reward is favourable based on valuations. This is a period to cut down on the tail positions in the portfolio and consolidate in better quality stocks," Mahesh Patil, CIO, Aditya Birla Sun Life AMC, said.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)