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In 2008, when Delhi, Rajasthan, Chhattisgarh, Madhya Pradesh and Mizoram held assembly elections, the results were declared on December 7, a Sunday. On that occasion, the market was hoping for a 4-1 score line in favour of the Congress, since the consensus view was that a poor showing in state polls would hold the UPA government from pursuing further reforms. Eventually, Congress won in three out of five states, losing Madhya Pradesh, as expected, and Chhattisgarh, in a closely fought battle. The following day, the Nifty and Sensex surged over 2 percent.
But the upbeat mood on the bourses were not the derivative of election results alone. On the same day as the poll verdict, the government announced a fiscal stimulus package to revive India’s economy, which was feeling the aftershocks of the global financial crisis. In the next trading session (December 9 was a public holiday), indices climbed another 5 percent.
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