The India Story is unstoppable!

June 14, 2024 2 min read

Market Performance Under Different Prime Ministers

A recent compilation of market performance under various Indian prime ministers over the past 35 years offers some intriguing insights. The data covers market gains during each prime minister’s term, highlighting the different periods and their respective market outcomes. This analysis can help understand how political leadership influences market trends.

Source : Ishmohit Arora (SOIC)

Market Gains Under Different Leaders

Starting with VP Singh, who served for 0.9 years, the market saw a significant rise of 95.6%. During the Harshad Mehta period, under Chandrasekhar, who was in office for 0.6 years, the market performance was also notable. Narasimha Rao, who initiated the opening up of the Indian economy in 1991, saw the market gain 180% over his five-year term.

Atal Bihari Vajpayee’s tenure from 1998 to 2004 saw a relatively modest gain of 30%. This period stands out as one of the slower growth phases in the market. In contrast, Dr. Manmohan Singh, who served from 2004 to 2009, matched Rao’s performance with another 180% gain. During Singh’s second term from 2009 to 2014, the market rose by 78%.

Prime Minister Narendra Modi’s first term saw a 61% gain, and his second term recorded an 82% increase. When looking at five-year periods, the market gains have varied between 60% and 180%. This fluctuation is influenced by global fund flows towards emerging markets and other underlying investment conditions.

Stability Despite Political Changes

One key takeaway from this data is that it would take significant effort for any prime minister to derail India’s economic story. Despite political changes, the market machinery tends to function well, showing resilience. The performance differences between the major parties are not drastically different in terms of market outcomes.

Consistent Growth Over the Years

In the last 15 years, the market has consistently gained about 60% to 70% every five years, translating to a compound annual growth rate (CAGR) of around 12%. This period includes the significant emerging market rush between 2004 and 2008, contributing to these gains. While political events can cause temporary fluctuations, the long-term growth trajectory remains positive.

There is often concern about the potential impact on market stability. However, historical data suggests that market performance is not heavily dependent on the political party in power. The next five years also look promising for India’s growth story, reinforcing the importance of focusing on long-term investment strategies.

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