Investing in stock market right now? Should low voter turnout worry you? Bernstein says don't be jittery

Bernstein said that unless there is a steep decline in voter turnout or significant anti-incumbency, there will be no major impact on overall election results.

Bernstein reflected on recent voter turnout figures in the ongoing Lok Sabha elections and said that there is no obvious correlation between voting percentage versus election outcomes based on past elections. Investors should not to read too much into the turnout numbers, it said, noting, “A large decline (over 5 per cent) without much anti-incumbency should see them repeating figures of 2019 with minor up/down revisions. Only the case of a large vote share decline (over 5 per cent) and significant anti-incumbency is where the elections become a market-defining event. The fact that the opposition is more united nationally this time should start having meaningful repercussions only at this stage.”

Stock market: BJP supporters during a public meeting of Prime Minister Narendra Modi for Lok Sabha elections, in Dhar, Madhya Pradesh. (PTI)

Lok Sabha elections began on April 19 and the seven-phase polls will conclude on June 1. Results will be announced on June 4.

Bernstein also said that the data released on voter turnout the same day does not include the ballot voting. Additionally the ballot paper impact is larger than what used to be in the past years, it said. But unless there is a steep decline in voter turnout or significant anti-incumbency, there will be no major impact on the overall election results and the BJP will easily win in the Lok Sabha elections, it said.

"A lack of any connection with an issue on the ground or lack of connection with opposition, for instance, may discourage these swing voters from coming out and voting. This also gets one interesting result: there weren’t enough swing votes in favor of INC in 2019 (barely 0.5 per cent). So, assuming the core voters will mostly turn up, the loss due to swing voters will likely be for NDA," Bernstein said.

It added, “Assuming a minor decline of 2.5 per cent for overall voting and generously assuming INC captures 75 per cent of the anti-incumbency, we still have the BJP’s vote share at 32.7% compared to that of INC at 22.2 per cent. The vote percentage difference is only marginally behind the 2014 difference, still translating to a comfortable victory. Thus, even with anti-incumbency, a minor vote share decline does not translate to any election surprises. The opposition seats will go up given that we’re seeing a combined INDIA alliance, but a major loss to BJP seats is unlikely.”