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

Author

Listed:
  • Pandey, Dharen Kumar
  • Rajesh, S.P.
  • Kumari, Vineeta

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.

Suggested Citation

  • Pandey, Dharen Kumar & Rajesh, S.P. & Kumari, Vineeta, 2024. "Do election results resolve economic uncertainty? Evidence from Indian election 2024," Finance Research Letters, Elsevier, vol. 69(PB).
    • Handle: RePEc:eee:finlet:v:69:y:2024:i:pb:s1544612324012807
    DOI: 10.1016/j.frl.2024.106251
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