HOME > MARKETS > MARKET COMMENTARY
  MARKET COMMENTARY
EQUITY
Markets likely to make cautious start ahead of election verdict
May-23-2019

Indian markets ended volatile session in green territory on Wednesday amid mixed global cues on continued escalation in trade tensions. Today, the start of session is likely to be cautious ahead of the final results of the 2019 Lok Sabha elections amid weak cues from Asian peers. Counting of votes begins and final results are likely to be declared late in day. Exit polls suggest that Prime Minister Narendra Modi-led coalition government is likely to come back to power for second term, with comfortable majority. Traders will also be concerned about a private report stating that the value of merger and acquisition deals announced in April stood at $735 million (over Rs 5,100 crore), a decline of 96% from $19,142 million in the year-ago period. However, some respite may come later in the day with report that the finance ministry has prepared 100-day agenda for the new government with an aim to push the economy which has slipped to 6.6% in the third quarter of 2018-19, as the Lok Sabha election process coming to an end. Among other things, the agenda is likely to focus on increasing private investment, employment generation and giving relief to the farm sector. Besides, the agenda also include improving direct and indirect tax collection. Simplification of tax procedure especially with regards to the goods and services tax is also on the cards. There will be some buzz in the non-banking financial companies (NBFCs) stocks with report that the Finance Ministry may ask the Reserve Bank of India (RBI) to put a strong regulatory framework around NBFCs accessing non-bank public deposits, like pension and provident fund, as these are savings of the salaried class and must be kept away from avoidable risks like infrastructure NBFCs. Besides, Fitch Ratings’ report stated that the debt crisis in IL&FS has adversely impacted growth of the NBFC sector in India and might lead to its consolidation. There will be lots of earnings reaction based on the performance of the companies.

The US markets settled in red territory on Wednesday amid report that the White House was prepared to target more Chinese technology firms in its trade wrangling with Beijing. Asian markets are trading mostly lower on Thursday as investors worried about the ongoing trade tensions between the United States and China.

Back home, in a volatile session, Indian equities benchmarks gained ground to settle in green terrain on Wednesday, with Sensex and Nifty reclaiming their crucial psychological levels of 39,100 and 11,700, respectively. After a cautious start, the markets remained positive for the most part of the session, aided by the Organisation for Economic Co-operation and Development’s (OECD) statement that the Indian economic growth will regain strength and approach 7.5% by 2020. The new income scheme for small farmers will support rural consumption. Traders were also optimistic amid United Nations’ (UN) report stating that the India's economy is projected to grow at 7.1% in current financial year (FY20) on the back of strong domestic consumption and investment. It projected the economy will grow 7% in last financial year (FY19). But, key indices faced volatility during the trade, as anxiety persisted on the street ahead of final results of the 2019 Lok Sabha elections to be declared tomorrow, May 23, 2019. But, bourses managed to end higher, taking support from a private report that land and labour reforms, privatisation and export promotion would be at the top of agenda of the new government irrespective of which party or coalition takes charge after the poll results on May 23. Markets participants took a note of the Vice President of India, M. Venkaiah Naidu’s statement that India has emerged as an attractive destination for global investors and asked educational institutions to maintain high standards and foster academic excellence. Observing that India was poised to become a $5 trillion economy in the next few years, Naidu said there was a need to remove economic imbalances, urban-rural divide, end gender and social discrimination and enhance the prestige of all the institutions, including the Supreme Court, CAG, CVC, EC, Parliament and State Legislatures. Finally, the BSE Sensex gained 140.41 points or 0.36% to 39,110.21, while the CNX Nifty was up by 28.80 points or 0.25% to 11,737.90.
  RELATED NEWS >>
Most Viewed >>
April 19 , 2024
JPMorgan bullish on Indian stocks, suggests ma
April 19 , 2024
Is it time to take small bets in FMCG stocks?
April 18 , 2024
Mutual fund industry assets grow 35% in FY24
April 19 , 2024
Lok Sabha Elections 2024: How will they impact
EXPLORE
© CITRUS INTERACTIVE
Designed & Developed Accord Fintech Pvt. Ltd.