Lok Sabha Elections 2024 trading strategy: After the conclusion of six voting phases and one remaining, poll strategists are busy assessing the Lok Sabha Election outcome on June 4, 2024. Meanwhile, market experts are studying the potential segments that may outperform on election day, the likely movement of Sensex and Nifty 50, and the average market returns in the short, medium, or long term. Market participants had priced in a potential third-term victory of the Bharatiya Janta Party (BJP), however, much will depend upon the outcome of Lok Sabha Election Exit Polls 2024, which will be released on June 1, 2024.
‘’In our view, there is a high probability that the NDA will form the government with the BJP getting the full majority. Elections will be over on 1st June and the market will react to exit polls on June 3. We note that in the past two elections, the BJP got significantly higher seats compared to poll predictions,” said Jitendra Gohil, Chief Investment Strategist, Kotak Alternate Asset Managers.
Stock Market Today
The Indian stock market experienced a widespread selloff on Thursday, May 30, on the expiry day of May futures and options (F&O) contracts. Market participants remained jittery ahead of the Lok Sabha election 2024 results.
The Sensex and the Nifty 50 experienced their fifth consecutive session of losses, each dropping by about two per cent over this period, resulting in investors losing nearly ₹10 lakh crore. Sensex ended with a loss of 617 points, or 0.83 per cent, at 73,885.60, while the Nifty 50 closed the day at 22,488.65, down 216 points, or 0.95 per cent.
The 30-share BSE index has been on a downtrend since May 23 when it closed at its lifetime high level. The NSE index has lost 479 points in the five sessions to Thursday. The losses were even deeper in the mid and small-cap segments today as the BSE Midcap and Smallcap indices fell 1.21 per cent and 1.33 per cent respectively.
Asian stocks fell 1.3%, tracking the overnight drop on Wall Street on increasing bets that global interest rates would stay higher for longer.
Investors are trimming their positions ahead of the election outcome as a precaution, said Deepak Jasani, head of retail research, HDFC Securities, adding that weakness in global markets was also weighing.
Retail and high net-worth investors trimmed their net long positions in Indian index futures by a sixth from mid-May to May 28, NSE data showed. “The market is completely discounting the fact that the current government will stay. However, if the government is not going to make it to the majority, it will be completely catastrophic for the market” said Aishvarya Dadheech, founder and chief investment officer at Fident Asset Management.
Lok Sabha Elections 2024 Trading Strategy
Sensex, Nifty 50 movement on June 4
Analysts said that the current fall happening in the Nifty index is a minor speed bump in the current scheme of things. ‘’We expect the Nifty to be above the 23,000 levels on the 4th of June which is at least 500 points higher than today’s move,” said Rahul Ghose, CEO, Hedged.in
‘’ The crucial level for the Iindex is not 22,500, but is 22,000 where the maximum put writers are currently present. Large players are also creating short straddles at the 23,000 level for the June expiry which is further corroborating this earlier point,” added Ghose.
“We maintain our constructive stance on equities ahead of the general election results on 4th June. Our investment committee decided to maintain a neural stance on equities i.e. to stay invested in line with asset allocation,” said Kotak’s Jitendra Gohil.
Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.
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Published: 30 May 2024, 07:54 PM IST
