Abstract
We examine the immediate short-term effects of the election results using event study analysis on 1546 NSE-listed firms and find significant adverse market reactions around the counting day. However, the market recovers with expectations of a stable government. Sectoral analysis showed varied recovery across sectors. Cross-sectional analysis indicates that larger firms and those with better fundamentals manage uncertainties better, while volatile and highly-priced stocks suffer more. The findings theoretically contribute to the semi-strong form of the efficient market and uncertain information hypotheses.
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