Recently, the research by domestic brokerage firm ICICI Direct published data where it projected that in the upcoming 6-9 months of the pre-election & post-election, the benchmark headline index will hit the 21,000 mark. The ICICI Direct said, “Indian equity markets have also highlighted certain characteristics depending upon the election cycle that is currently prevalent.”
In the graph that it has published among the four parts of the election cycle, i.e. election year, post-election year, midterm years, and pre-election year, 73% returns were delivered in 2003, 51% in 1988 & 23% in 1993. The index performed positively in 7 out of 10 instances in the pre-election year. The three negatives are due to the unstable political scenario in 1995 & 1998 and global financial crisis in 2008, respectively. It said that 2023, a pre-election year, will have a strong impact on the sentiments in equity markets.
The brokerage firm also cited that it expects the benchmark index to rise to the 50,000 mark by the end of the decade of 2030. It also expects that Indian equities shall deliver a decadal move, which will be 5 times of the headline indices following the rhythm of the US and the Nikkei in the past.