Exit polls for the five states announced post market hours on Monday handed the most populous state in India – Uttar Pradesh – yet again to Bharatiya Janata Party, while Arvind Kejriwal-led Aam Aadmi Party is projected to rule Punjab.
The outcome of assembly polls across these key states – UP, Punjab, Goa, Mizoram and Uttarakhand – on March 10 comes at a time global headwinds in the form of geopolitical crisis between Russia and Ukraine, rising oil prices and the possible aggressive rate hike by the US Federal Reserve later in March have already taken center stage.
Analysts say, the outcome of UP will be keenly watched, as it will pave the way how ruling NDA/ Bharatiya Janata Party approaches and prepares for the general elections due in 2024.
For G Chokkalingam, founder and chief investment officer at Equinomics Research, there are other bigger factors for the markets to worry about than the state election outcome right now. He thinks the market reaction will be short-lived. Here’s what he said in a chat with Business Standard’s Puneet Wadhwa:
Political pundits, however, have a different view point and suggest that the outcome of these state polls, especially that of UP, may have a bearing on the general elections due in 2024.
According to Pradeep Gupta, CMD of consumer data intelligence company Axis My India, Consumer Sentiment Index survey across the country suggests 50 per cent believe that the results of these five assembly elections will have a considerable impact on the 2024 national elections.
The geopolitical concerns that have cast a shadow on the markets has seen the frontline indices – the
S&P BSE Sensex and the
Nifty 50 – slip 8.2 per cent and 8.3 per cent respectively in the past one month.
Let’s hear what AK Prabhakar, head of research at IDBI Capital has to say about how he thinks the markets will interpret the outcome.
“A thin margin of victory may prompt the BJP / NDA to go slow on the reform process and even look at excise duty cuts and a milder hike in auto fuel rates in the backdrop of rising crude oil prices. All this will be perceived negatively by the markets,” says AK Prabhakar, Head of Research, IDBI Capital.
On Wednesday, the markets will continue to monitor the global situation closely along with how crude oil prices play out. Stock-specific action is likely to continue.
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 "Will assembly poll outcome be a non-event for the markets?")
