We shall be discussing today what will be the state of share market after the current parliament election results are out. Will there be a bear effect of a bull effect? We have done well considering the economic slowdown. How will the election and the new government help in this run?

The reports say historically the markets have crashed after polls if the public mandate is not clear. Now that it seems we are to see a severely fractured mandate we can expect a fall in share market in 15 days. But there is one thing that may make things different this time. Actually we are almost sure that we are going to witness a hung parliament. So the results may not come as a shock so the effect would not be drastic either. It could be less pronounced.

Now you may be wondering, why a hung parliament would bring down the share market? A hung parliament or a fractured mandate is actually a state when no political party or coalition has full majority to make form the government. It shows the making of an unstable government. An unstable government will not be as effective in taking strong economic decisions or other decisions of national importance. Investors then feel insecure about their investments in this particular country. This leads to a huge withdrawal of FDI which eventually brings down the market.

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