As the Bihar elections conclude with a high voter turnout, exit polls hint at an NDA victory. Analysts weigh in on potential market reactions, emphasising the local issues at play and the limited impact on central policy.
The Bihar election 2025 has concluded with record voter turnout, and several exit polls suggest the National Democratic Alliance (NDA) may return to power.
The outcome of assembly elections usually does not have a major impact on stock market sentiment, as they are contested on local issues and may not necessarily influence the pace or extent of the central government’s policy decisions.
However, it is difficult to say that the results of the 2025 Bihar elections, the third most populous state in India, will be a non-event for the markets.
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Nevertheless, the results are unlikely to have a lingering impact on the domestic market as they may not trigger any major changes in the central government’s policies and capital expenditure plans.
“Lok Sabha seats represent around 7 per cent of the total number of Lok Sabha seats, which is quite significant. Still, even if NDA shows poor performance in the exit poll, it may give any major setback to the stock markets in the short term,” said G Chokkalingam, the founder and head of research at Equinomics Research Private Limited.
However, Chokkalingam believes assembly election verdicts close to the 2029 Lok Sabha election would be highly critical for stock markets.
Chokkalingam underscored that the next Lok Sabha election is still far away – election verdicts have surprised even within three to six months. Hence, the market may not worry or reward much for any decisive outcome from this Bihar poll, as the next Lok Sabha election is likely to happen after 3.5 years.
The previous Bihar state assembly election verdict and subsequent market movement would, to a large extent, substantiate this point.
VK Vijayakumar, chief investment strategist at Geojit Investments Limited, believes a decisive win for the NDA will be a sentiment positive from the market perspective, but it is unlikely to influence the present market trend in any way.
“The market is in a consolidation phase supported by prospects of improving earnings growth, but is prevented from breaking out to new record levels by sustained FII selling. A poor show by the NDA will be sentiment negative,” said Vijayakumar.
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