Trader's guide to India elections says it is time to buy equities

While PM Modi faces an uphill battle to sustain his party's majority in Lok Sabha, the past 6 elections show positive returns for Indian equities over the two years that straddle the vote

Indian stocks have been roughed up along with most markets in recent months, but there could soon be reason to cheer. National elections are due by 2019, and modern history shows that tends to be a good thing for investors.

While Prime Minister Narendra Modi faces an uphill battle to sustain his party’s majority in the key lower house of parliament, the past six elections show positive returns for Indian equities over the two years that straddle the vote — regardless of whether power changed hands.

The fiscal years prior to elections showed positive gains for the benchmark S&P BSE Sensex index