Prime minister Narendra Modi-led NDA government has grabbed another historic mandate for the coming five years. This has put an end to the political uncertainty and the focus will now shift to addressing the slowdown in the economy. The market zoomed on the result day with Nifty and Sensex testing 12,000 and 40,000 mark, respectively. "Markets were looking for stability, continuity and strong leadership rather than a fractured mandate - this has led the benchmark indices to new highs. We believe India allocation from global funds will increase and more ETF flows are likely over the short term that could drive the markets even higher," says B Gopkumar, ED and CEO, Reliance Securities.

While the market barometers indeed touched the historic milestones on the D-day, these were not the highest intraday gains bourses registered. In fact, it was the least intraday increase of 1.2 per cent and 1.3 per cent, respectively for Sensex and Nifty. Going by this yardstick, in the past four election days (excluding year 2009 since the counting date was not a trading day), the intraday gains were over 2 per cent. We saw a jump of 4 per cent and 4.5 per cent, respectively in Nifty and Sensex in May 2014.

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The euphoria, however, was short-lived as after clocking new highs, the index pared gains and tumbled over 1,300 points from its intra-day high on immense profit-booking. Both the Sensex and Nifty are down almost 1 per cent, again an unusual phenomenon witnessed over the past four elections since 1999 - the year of first full five-year term for a government since 1991. It is to be noted that the date of counting was not part of the published election programme until the year 1996. The historical data reveals that this was the first instance of negative return on a result day. In 2014, the Nifty inched 1.1 per cent compared to tepid returns of 0.4 per cent when UPA-I came to power.   

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"The current government has won another historic mandate for coming five years. While it is good news for investors from a stability point of view, there is a clear task cut out for this government. Some clear reforms that markets desire are easing of liquidity and bringing down lending rates to kick start demand, tackle liquidity challenges for the NBFC sector to avoid systemic challenges in the financial sector and clear bottlenecks, especially for manufacturing sector to encourage foreign direct investments into India. Focus on infrastructure development and executing the current policies more efficiently are also needed," says Ashish Shanker, Head of Investment Advisory, Motilal Oswal Private Wealth Management. 

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