Election results and stock markets: If history can predict the future

"Expect reform-driven targeted expenditure agendas to continue from a policy standpoint, while a healthy macro balance sheet of all economic agents of India augurs well for a higher trend growth path," said Madhavi Arora, Lead Economist, .

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On the flip side, any unexpected results could trigger knee-jerk reactions in financial markets in the near term.

"Any unexpected outcome will likely be perceived negatively at least at first, due to political instability and possible policy paralysis weighing on and impacting investor confidence. This could trigger knee-jerk reactions in financial markets in the near term, with equity valuations possibly testing pre-NDA levels," said .

However, historically, any market underperformance triggered by tends to reverse in the medium to long term, as markets and businesses adapt to new government policies.

Despite the potential for near-term result-driven uncertainty if things don't pan out as expected, most experts are of the view that any sharp weakness in equities could offer buying opportunities.

"In a scenario, where the does not secure a majority but the NDA forms a government under the leadership of Modi as PM – this might lead to sharp sell-off in equities. Assuming a stable alliance for the next five years, we would recommend buying equities on steep correction," said .

From a sector perspective, a strong BJP mandate would imply an increased focus on infrastructure, which also includes public sector play.

On the flip side, a weaker BJP mandate may lead to more spending on consumption and lower-income households, which broader markets may not like, though it could help consumption-led sectors perform relatively well.

"On a sectoral level, we find valuation comfort in private banks and consumption space. As policy continuity is in our base case, we expect healthy gains to follow election results, and we believe any dips should be bought into," said .

Whatever the outcome, the focus will eventually return to macro, earnings growth, and the reasonability of valuations. In the immediate run, all roads will lead to the Budget, which will likely be tabled in July.

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