Poll-sensitive

The Sensex, or the sensitive index, has been living up to its name in more ways than one. While the stock market has cheered the Sensex’s recent rise, a little-known broking house (Apollo Sindhoori Capital Investments Ltd) has put out a research note putting some perspective to this. The broking firm has looked at the movement of the Sensex a month prior and a month after each national election from 1991, and the result is almost unequivocal — in the month following the elections, the market more than loses all the gains made in the month prior to the elections. In both 1991 and 1996, the pre-election gain was more than the post-election loss (13 and 5 per cent for 1991, and 17 and 6 per cent for 1996). In 1998, the Sensex gained 4 per cent in the month before the election and lost 5 per cent in the month after; in 1999, it gained 9 per cent and then lost 15 per cent; in 2004, it gained 5 per cent and then lost 29 per cent. Will 2009 be any different?