India’s benchmark equity index – the Sensex seems to have a nose for U.S. presidents in the making. It has signalled the outcome of the last four U.S. elections. Every time the Sensex gained in the three months prior to the vote, the incumbent party emerged victorious, and vice versa.
Between August to November 2000, the Sensex fell 6 percent, and the incumbent Democratic Party ended up on the losing side of the U.S. presidential elections.
In 2004, the Sensex rallied 10 percent, and the incumbent, George W Bush, defeated his Democratic Party rival.
The 2008 elections were held in the backdrop of the global financial crisis. The Sensex plunged 27 percent in the three months prior to the vote and Barack Obama won the race to the White House, ending the Republican Party’s eight-year reign.
The trend was no different in 2012. The Indian benchmark index rose 8 percent, and Obama got re-elected.
This time around, the Sensex has lost around 2 percent since August. If the trend holds up, it could foreshadow a loss for Hillary Clinton.