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Poll vault: Markets likely to cheer election results today

business Updated: Dec 08, 2013 23:49 IST
HT Correspondents
HT Correspondents
Hindustan Times
Assembly election results

India’s stock markets are expected to jump on Monday, amid hopes that stable governments in key states could be a precursor to a steady regime at the Centre after the 2014 Lok Sabha elections, fast-tracking decision-making and reforms initiatives, experts said.

“The market is pinning its hopes on a BJP-led government at the Centre,” said Amar Ambani, research head at IIFL, but made it clear that this was not his personal opinion, rather a general perception among market participants. “Likely BJP wins in the state elections of Rajasthan, MP and Chhattisgarh may further boost the current rally.”

“Markets would open higher on Monday,” said Gajendra Nagpal, chief executive officer and founder, Augment Financial Services.

“Investor sentiment is positive. However, profit-booking may happen at higher levels. People are looking for a Gujarat-like model of government and growth in the country. This is the reason BJP has shown good performance in all the four states,” he added.

Global investment banks and brokerage houses have said that a BJP victory during the Lok Sabha elections could lead to a strong market rally.

Japanese research firm Nomura and US investment banking major Goldman Sachs have come out with reports saying a stable Narendra Modi-led BJP government could boost investor sentiments.

“A BJP win in the state elections would mean that markets resume their upward journey,” said Kishor P Ostwal, chairman and managing director, CNI Research.

Credit rating agency Moody’s said in a note on Thursday that “Although there have been policy efforts to induce investment in the last year, their impact may not be evident in the near-term. The outcome of national elections next year could affect growth, depending on how it impacts sentiment and policies.”

In a report last month Standard and Poor’s (S&P) placed the onus squarely on the next government to turnaround the economy, underlining the importance of speedier decision making and push ahead with reforms.

(With agency inputs)