Macro headwinds could overshadow state election results on Thursday

Benchmark Sensex has dropped close to 15 per cent from its peak in October 2021.

More than half a dozen exit polls on Monday said the Bharatiya Janata Party will retain power in Uttar Pradesh—a prediction markets would have cheered, seeing it as a precursor to the 2024 General Elections. However, this time around macro headwinds are expected to overshadow state election results. 

“Macro head-winds may limit the euphoria of a BJP win for markets,” said a note by Kotak Institutional Equities. “In our view, the increasing risks of elevated and persistent energy prices and its resulting impact on various macro parameters will remain the dominant theme in shaping market direction in the near term.”

The benchmark