Do election results resolve economic uncertainty? Evidence from Indian election 2024

Dharen Pandey, S.P. Rajesh and Vineeta Kumari

Finance Research Letters, 2024, vol. 69, issue PB

Abstract: We examine the immediate short-term effects of the election results using event study analysis on 1546 NSE-listed firms and find significant adverse market reactions around the counting day. However, the market recovers with expectations of a stable government. Sectoral analysis showed varied recovery across sectors. Cross-sectional analysis indicates that larger firms and those with better fundamentals manage uncertainties better, while volatile and highly-priced stocks suffer more. The findings theoretically contribute to the semi-strong form of the efficient market and uncertain information hypotheses.

Keywords: Election results; Market reaction; Event study; Market sentiment; India; Uncertainty (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:69:y:2024:i:pb:s1544612324012807

DOI: 10.1016/j.frl.2024.106251

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