State election outcomes can differ greatly from national elections. So, is the exuberance in the markets rational or misplaced?
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.