What should stock market investors do in the election season?

Experts say it is important to resist the fear of missing out (FOMO) and avoid making short-term investments; instead, investors should focus on the long term ARSHAD KHAN @ New Delhi THE sharp correction in India's equity market last week has left investors in a turmoil state.

-  ARSHAD KHAN

Following the total market capitalisation of all BSE listed firms falling more than 7.5 lakh crore in the single session of Thursday, investors are now worried as to whether they should remain invested in the market or exit until this period of high volatility stabilises once the crucial general election results are out in the first week of June.

India's equity market benchmarks BSE Sensex and NSE Nifty-crashed about 2% each last week as the street now fears that a third term for the Prime Minister Narendra Modi-led NDA government may not be as decisive as initially expected. This concern is exaggerated by a lower voter turnout and the domestic market's premium valuation led to high outflow of funds by foreign institutional investors.

Anirudh Garg, Partner and Fund Manager at Invasset said that the expectations regarding the 2024 general elections result are inherently ambiguous, as they can vary significantly from person to person and from region to region. "However, from a broader market perspective, I believe there would be a positive reception if a stable BJP government were to continue at the centre," he added.