Decoding Sensex, Nifty’s volatile session amid BJP’s likely state election loss; what experts say
13/12/2018
MUMBAI, DEC 12:
Even as the domestic stock markets witnessed an extremely volatile session on Tuesday showing wild swings closely tracking the state elections, experts say that the stock markets had factored in a much worse result for Narendra Modi’s BJP in the ongoing polls. “The markets are already in a down trend. They have discounted a 3-0 white wash. If even one state goes the BJP way, it will result in short-covering,” VK Sharma, head PCG and capital markets strategy, HDFC Securities noted.In a session replete with wild swings, the Sensex ended Tuesday’s session 190 points higher even as the Nifty 50 closed above the 10,550-mark closely tracking the state election outcome trends. The Sensex recovered 724 points from the day’s lows to end at 35,150.01, while Nifty 50 ended 60.70 points higher at 10,549.15.
Taking stock of the early trends in counting of polls, Raamdeo Agrawal, Co-Founder, Motilal Oswal Financial Services said that the results were better than what market had expected. “I am surprised by Madhya Pradesh’s (MP) results,” Raamdeo Agrawal told in an interview to CNBC TV18. Further, the market had discounted a lot more than reality, he added.
Notably, state poll results wasn’t the only factor weighing on the stock market sentiment, and RBI governor Urjit Patel’s exit too added to the volatility. Interestingly, markets initially plunged in reaction to Reserve Bank of India Governor Urjit Patel’s unexpected resignation late on Monday, which shocked many investors. “Patel’s resignation bodes poorly for macroeconomic and financial stability in India,” Fitch Solutions Macro Research, a unit of Fitch Group, said.
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