Political risk has become an overarching theme for investors in Thailand, India and Indonesia, where general elections are due this year. So far this year, foreign institutional investors (FIIs) have pumped in $1.3 billion in Indian markets. And, investor preference has shifted to cyclical stocks such as those in the capital goods, infrastructure and real estate, banking and consumer durables sectors. Foreign inflows into the equity market appear to be chasing the prospect of a supposed game-changing victory for the Bharatiya Janata Party (BJP), with the party’s strong performance in recent state elections boosting these hopes, analysts say. Most believe a Narendra Modi-led National Democratic Alliance (NDA) victory is almost certain and, therefore, a positive sentiment is being built. Positive sentiment on expectations of a Modi-led NDA victory puts India ahead of other poll-bound emerging markets.Despite the overall positive sentiment, analysts caution markets could correct in case the election outcome throws up a hung Parliament or a Third Front-led government. Even if the NDA is voted to power, the rally could take a breather, as investors wait and assess how the economic policies and reform measures in India take shape.