Why market raced post 2008 Delhi, Rajasthan, Madhya Pradesh, Chhatisgarh, Mizoram polls

Riken Mehta 
Moneycontrol.com 

Follow me on Twitter @mehtariken 

In 2008, when Delhi, Rajasthan, Chhattisgarh, Madhya Pradesh and Mizoram held assembly elections, the results were declared on December 7, a Sunday. On that occasion, the market was hoping for a 4-1 score line in favour of the Congress, since the consensus view was that a poor showing in state polls would hold the UPA government from pursuing further reforms. Eventually, Congress won in three out of five states, losing Madhya Pradesh, as expected, and Chhattisgarh, in a closely fought battle. The following day, the Nifty and Sensex surged over 2 percent.

But the upbeat mood on the bourses were not the derivative of election results alone. On the same day as the poll verdict, the government announced a fiscal stimulus package to revive India’s economy, which was feeling the aftershocks of the global financial crisis. In the next trading session (December 9 was a public holiday), indices climbed another 5 percent.

Indices	8-Dec-08	10-Dec-08
Nifty	2.58%	5.17%
Sensex	2.20%	5.38%
Bank Nifty	1.68%	2.71%
FIIs (Buy)	Rs 460 cr	Rs 988 cr
Rupee	49.22	49.12

Difference between 2008 and now

Nifty made a low of 2502 on November 20, 2008 few days prior to state election results. In 2013, Nifty is trading close to its all-time high. After state election results in 2008, Nifty has never revisited lows of 2502 so far.

In 2008, developing economies like US and UK were in a sub-prime mess whereas in 2013, they are leading the way. Positive global cues in 2013 compared to 2008.

India's Q2 GDP in 2008 was 7.6% whereas in 2013, Q2 GDP is 4.8%. Domestic consumption story has slowed down.

In 2008,  Congress won three out of five states and came into power with majority. In 2013, will it be BJP?

In 2008, rupee was around 49 mark, In 2013 rupee is around 62.

2008 poll results

States	Congress	BJP	Others	Total
Madhya Pradesh	71	143	16	230
Delhi	43	23	4	70
Rajasthan	96	78	26	200
Chhatisgarh	38	50	2	90
Mizoram	32	MNF 3	5	40

Analysis: How Sensex & Dow Jones react to US presidential polls

Riken Mehta
Moneycontrol.com

Judging from the initial reaction of benchmark indices, President Barack Obama’s re-election appears to have struck the right chord among investors in India. But historical trends show that the Indian stock market has been largely indifferent to the outcome of Presidential polls in the US, except in 1996.

Interestingly, four out of five times in the past, the Sensex and the Dow Jones have moved in opposite directions after the Presidential elections threw up a winner. The Sensex surged 3.37% when Bill Clinton emerged victorious in 1992, but Dow Jones lost 0.90%. The US index gained 1.6% in 1996, when Clinton was re-elected as the the President. However, Sensex lost marginally after Clinton's re-election. Similarly in 2008, when Obama became the 44th US President, investors in India appeared more pleased, going by the upmove in the Sensex.

Refer to the table below to check out how Indian and the US markets reacted after US presidential polls.

Year	US Presidential	Political	Electoral	US Presidential	Political	Electoral	Dow Jones	Sensex
	Candidate Winner	Party	Votes Won	Candidate Loser	Party	Votes Won
04-Nov-08	Barack Obama (44th Pres)	Democratic	365	John McCain	Republican	173	-5.04%	2.84%
02-Nov-04	George W. Bush (43rd)	Republican	286	John Kerry	Democratic	251	1.01%	0.87%
07-Nov-00	George W. Bush (43rd)	Republican	271	Al Gore	Democratic	266	-0.41%	0.59%
05-Nov-96	Bill Clinton (42nd)	Democratic	379	Bob Dole	Republican	159	1.58%	-0.96%
03-Nov-92	Bill Clinton (42nd)	Democratic	370	George H.W. Bush	Republican	168	-0.90%	3.37%