Impact of General Elections 2014 on Indian Stock Market with Special References to the Stock of Select Companies in BSE

Abstract

Indian stock market is one of the oldest stock markets in Asia that has shown maturity. Companies raise funds from secondary market, which affected by various factors like economic policy, industrial policy, political stability-changes in leadership, announcements by companies and the like. In 2014 elections, investors were excited with expectations that BJP will form government with Narendra Modi as prime minister, hoping he will give priority to the development by reforming policies and governance. The paper aims to study the effect of general elections on returns of the select stocks before and after 15 days around General election result 2014, assuming other factors remains neutral. The study is an event study. The data obtained from the Bombay Stock Exchange (BSE) website. The population of the study comprises of 30 companies of BSE Sensex. The researcher selected five companies for the study - Bharati Airtel Limited, Infosys Limited, ICICI Bank, Mahindra and Mahindra Limited (M&M), and Coal India Limited. The collected data analysed with the used of mean return and volatility of the return.