Lok Sabha Exit Poll 2024 and Stock Market: Although it is still not decided who will win the 2024 Lok Sabha elections in India and how many seats he will need to form the next government, the market remains volatile during all the seven phases of the Lok Sabha elections.

Data shows that India VIX, a gauge of stock market volatility, has been oscillating between the 10 to 21 levels for most of the seven phases of the 2024 Lok Sabha elections in India.

When will the Lok Sabha 2024 exit poll be declared?

The Lok Sabha exit polls are likely to be announced after the completion of all seven phases on June 01. Political pundits expect the exit poll results for the 2024 Lok Sabha elections to start coming in by 7 pm on Saturday, June 01.

But why are the stock markets closed on June 1, the day of exit poll results?

The Indian stock market will be closed on Saturday and Sunday, June 01 and June 02. The Indian stock markets trade 5 days a week, Monday to Friday between 9 am and 4 pm, including pre-market and post-market (share price and index adjustment sessions).

Indian stock markets are closed for trading on Saturdays and Sundays unless the exchanges decide to open them for a special trading session.

The last time Indian stock markets were open on a Saturday was on May 18, when both BSE and NSE held a special session to test their disaster recovery mechanism. Earlier, both these stock exchanges remained open for the same purpose on March 2.

Will the stock market fall after the exit poll results on June 1?

Analysts believe that the market will remain volatile before the exit polls are released. After the exit polls are announced on Saturday, June 1, when the market opens on Monday, June 3, a huge surge is expected in it as well.

Although there is no direct correlation between voter turnout and election results, analysts believe the drop in voter turnout so far has created an element of uncertainty, which has also impacted the stock markets.

Who will form the government after the results of the Lok Sabha elections? Will the market fall after the exit polls of Lok Sabha elections 2024?

Or, do they believe that the Narendra Modi-led Bharatiya Janata Party (BJP) and its allies, collectively known as the National Democratic Alliance (NDA), will form the next government?

Analysts say the market expects the NDA to form the next government, although the margin of victory in the Lok Sabha elections and the final number of seats of the NDA versus the All India Alliance in the 2024 Lok Sabha elections are still a matter of debate. The market is expecting a stable government and policy continuity.

“Based on opinion polls, the market expects the NDA political alliance to return to power for a third time, while the BJP is highly likely to retain a majority. This anticipated political stability will ensure policy continuity, which will support market sentiment and India’s valuation premium,” Premal Kamdar of UBS Securities wrote in a recent note.


On the other hand, Kamdar said any unexpected outcome could trigger knee-jerk reactions in stock markets in the near term, with equity valuations possibly testing pre-NDA levels. He added that significant weakness in stocks could provide opportunities for investors to buy on dips.

Historically, any market weakness induced by election results tends to reverse in the medium to long term, as markets and businesses adapt to new government policies.

G Chokkalingam, Founder and Head of Research, Equinomics Research, said, “We expect the markets to open on June 3, ignoring the exit poll results, and recommend a cautious stance this week in particular. Investors can look to remain conservative by keeping a lot of cash and deploying it back after the election results. Paying a premium to buy the stock is also justified as we believe the bull-run will continue even ignoring the election results and any potential reaction.”

first published: 28 May 2024 | 8:04 am First

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