Electoral Shockwaves

A Novel Analysis of Market Volatility Surrounding India’s Prime Ministerial Elections

Bibliographic Data

ID16912707
AuthorsMurugesan Gayathri (0009-0002-9980-8319, Vellore Institute of Technology University), Sharon Sophia (0000-0002-5461-1224, Vellore Institute of Technology University, corresponding author)
Year2025
Volume15
Issue2
Publication date2025-04-01
Open AccessYes
TypeARTICLE
VenueSAGE Open (JOURNAL)
Journal identifiersISSN: 2158-2440 • E-ISSN: 2158-2440
PublisherSAGE Publications (PUBLISHER • US)
DOI10.1177/21582440251343955
OpenAlexW4411475657
LanguageEN
References cited21

This research explores the influence of Indian Prime Ministerial elections on the NSE Nifty 50 index, focusing on the election periods of 2019 and 2024. By employing an event study methodology combined with the Exponential Generalized Autoregressive Conditional Heteroskedasticity (EGARCH) model, the study evaluates how electoral events affect market behavior and volatility. The analysis covers event windows from April 1 to June 10 in both years, providing a comprehensive view of market reactions before, during, and after the elections. The results reveal significant market volatility around election dates, accompanied by notable fluctuations in stock returns. The EGARCH model underscores the presence of volatility clustering and the substantial impact of election-related news on market stability. This study provides insights into the impact of elections on financial markets in emerging economies like India, offering valuable guidance for investors, policymakers, and analysts

Autoregressive conditional heteroskedasticity · Econometrics · Economics · Emerging markets · Financial economics · Financial market · Geography · Macroeconomics · Monetary economics · Stock market · Stock market volatility · Volatility clustering · Fiscal Policies and Political Economy · Market Dynamics and Volatility · Monetary Policy and Economic Impact · Finance

Tools

Open DOIOpen Access