Bernstein Report: Analyzing Market Sentiments Amid Ongoing Elections

May 16, 2024 01:58 PM AEST | By Investing
 Bernstein Report: Analyzing Market Sentiments Amid Ongoing Elections

As the elections progress, the market's reaction reveals a blend of nervousness and fatigue. With no strong narrative emerging, discussions around the potential outcomes and their impact on the market have intensified. Should investors be worried? Bernstein's latest report delves into the pressing concerns surrounding the elections.

A key discussion point is the perceived weak voter turnout. Often, comparisons are made between phases of the current election and those of 2019, which can lead to misleading conclusions. For instance, comparing voter turnout in the first phase of 2019 with that of the current elections is problematic since the constituencies involved differ significantly. Additionally, initial panic arose when ballot paper numbers for the first two phases were updated a week later, increasing the turnout by over 5%. The most accurate comparison is within the same constituency, which does show a decline from 2019 but not as pronounced as compared to 2014.

So far, the average voter turnout for the first three phases is just over 66%, closely mirroring the overall turnout in 2014. In contrast, the 2019 elections saw voter turnout decline from 69.6% in phase 1 to 61.7% in phase 7. Currently, the phases don't indicate a loss of momentum in turnout, suggesting no significant damage to the overall numbers if this trend continues.

Comparisons with 2019 arise because it was the last general election, but the circumstances differ greatly. In 2019, national security issues like the Pulwama incident and Balakot strike galvanized voters. In contrast, the current scenario is more akin to 2014, with a government completing a decade in power and voters deciding on change. Unlike 2019's "pro-incumbency" wave, there is no central voting theme this time.

Historical data shows no clear correlation between voter turnout percentages and election results. Bernstein's analysis suggests that a 2-3% decline in voter turnout, combined with anti-incumbency sentiment, would slightly reduce the BJP's tally below 2014 levels. However, a significant decline (>5%) without strong anti-incumbency would likely yield results similar to 2019. Only a substantial drop in turnout paired with significant anti-incumbency could create a market-defining event. The opposition's increased unity could also start to impact outcomes at this stage.

Fatigue, boredom, and extensive data analysis have caused election narratives to shift rapidly. Initially, the elections seemed a non-event, with a decisive victory for the incumbent NDA government expected. However, after phase 1, the possibility of a surprise outcome has gained traction. The market, which had priced in considerable optimism, now faces growing unease due to lower voter turnout and shifting narratives.

Bernstein highlights that the elections are far from being a non-event; they have sparked significant market interest and concern. As voter turnout and political dynamics evolve, investors should closely monitor the situation, staying prepared for potential surprises that could impact the market.

You can get InvestingPro at a steep discount of up to 69%, for INR 216/month, for a very limited time. Investors are already taking advantage of such a mouth-watering price to ramp up their investing game. In case you are finally ready to up your investing journey, Click here before time runs out.

Read More: Here’s How to Hunt for “Undervalued Stocks” in This Correction

X (formerly, Twitter) - Aayush Khanna

This article first appeared in Investing.com


Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (“Kalkine Media, we or us”), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary.
The content published on Kalkine Media also includes feeds sourced from third-party providers. Kalkine does not assert any ownership rights over the content provided by these third-party sources. The inclusion of such feeds on the Website is for informational purposes only. Kalkine does not guarantee the accuracy, completeness, or reliability of the content obtained from third-party feeds. Furthermore, Kalkine Media shall not be held liable for any errors, omissions, or inaccuracies in the content obtained from third-party feeds, nor for any damages or losses arising from the use of such content.
Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyrighted to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have made reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.
This disclaimer is subject to change without notice. Users are advised to review this disclaimer periodically for any updates or modifications.


AU_advertise

Advertise your brand on Kalkine Media

Sponsored Articles


Investing Ideas

Previous Next
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.