State election outcomes can differ greatly from national elections. So, is the exuberance in the markets rational or misplaced?
Bhartiya Janta Party (BJP) workers and supporters celebrate the victory of Madhya Pradesh, Rajasthan, Chhattisgarh assembly state elections outside BJP headquarter, on December 3, 2023 in New Delhi, India.
Image: Salman Ali/Hindustan Times via Getty Images
Nothing works as much magic for stock markets’ exuberance as the playing out of a highly anticipated event just as expected. The reverse too, holds good. The state election results—the Bharatiya Janta Party (BJP) has won three large states—are likely to provide that adrenaline rush to markets, setting the stage for the general election next year.