The Global Stock Market Reaction To The 2024 Elections: Evidence From The National Elections Of The Russia, India & UK

The impact of political events on developed, emerging, and frontier economies is shown by this study, which examines stock market responses to the 2024 national elections in Russia, India, and the United Kingdom. Important political events like national elections have the power to affect investor sentiment, create price volatility, and introduce uncertainty into the financial markets. This study used an event study approach to examine the daily closing prices of 9 stock indexes from a variety of market categories, including frontier markets (such as Bangladesh, Pakistan, and Oman), developing economies (such as India, Russia, China and Brazil), and developed economies (such as the US, UK, Germany, and Japan). We compute abnormal returns (AR) and cumulative abnormal returns (CAR) during a 11-day event window (five days prior to and five days following the election) using a mean-adjusted return model. In order to precisely estimate expected returns, the estimation window is 120 days long. According to the findings, stock markets in frontier economies are more sensitive and volatile than those in developed and emerging markets, which may indicate a higher level of political risk. In addition to providing important insights for international investors and governments on managing political risk, this research adds to the body of knowledge by illustrating the diverse responses of stock markets around the world to political events. The results highlight the significance of comprehending how different markets react to elections, which is essential for risk assessment and portfolio management in a world economy that is becoming more integrated by the day.