Will Stock Market react to vote of trust?

The Congress-led UPA government will face the trust vote on Tuesday. It is expected that following this the stock market may react to this heavily. But on Friday there were normal trading in the market and a surge of 523 was recorded. "Friday’s upsurge was mostly because of a fall in oil prices. There is also a feeling that the government will survive and so the nuclear deal will go through," said KR Choksey Shares and Securities chairman Kisan Choksey, according to media reports. It business of the market was normal for two days, despite the political instability at the centre. Besides this factor, other factors like crude oil prices, inflation and the net profit or lost of companies in the first quarter, will influence the market.

Such political instabilities were also witnessed earlier but the market business was not affected heavily by then. Let’s have look on such situations and their impact on the Indian stock market, on April 11, 1997, the then prime minister HD Deve Gowda lost the confidence vote after the Congress withdrew support to the United Front government. Atal Bihari Vajpayee resigned before the confidence motion was put to vote on May 28, 1996, and the BJP then could not prove the majority. On November 7, 1990, VP Singh lost the vote of confidence after the BJP withdrew its support to the government. Even on such political instabilities, normal business was seen in Indian stock market. The day of vote of trust of a big deal for the UPA government but it may not have much hard impact on the stock market. However, the impact on the stock market would not be completely ignored.