How Elections Impact Stocks Market

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Stock market fluctuation is based on news. The news which is related to economy, political events weather conditions and relationship between countries could impact on stock market fluctuations. The objectives of the study is to analyze the effect of general elections on both NSE and BSE returns in pre-elections and post elections period and to analyze and compare the volatility (Ex), variance of daily returns in the stock market for short term , medium term & long term in pre-elections and post- elections period. The analysis has been emphasizing to measure the volatility, average returns and impact of elections. For this analysis 5 election sessions were considered that is 1998 – 2014. To analyse the data t test, f test are used. The daily closing prices of NIFTY & SENSEX index have been collected from the yahoo finance website for a period from 1998 to 2014 which includes a total of 5 Lok Sabha. The time period of the study has been classified into pre-elections and post elections period. It is concluded that the Election has more effect in short term, less in medium term and it diminishes in the long term after the Election announcement.