MARKET WRAP: Cong-JD(S) alliance buzz in Karnataka keeps sentiment in check

The markets pared gains to turn flat on reports of Congress-JD(S) alliance in Karnataka

8:58 AM

Vote counting begins: Trends & Result at 8:55 am

8:57 AM

SPECIAL REPORT Investors pricing in Modi win in 2019; oil, rupee among key concerns: UBS

Investors have priced in a “Modi win in 2019” as the base case and expect India’s economic growth to gain momentum in financial year 2018 – 19 (FY19), albeit with widening macro stability risks (inflation, current account deficit and fiscal deficit), suggests a recent report by UBS.

 

The report, authored by Tanvee Gupta Jain, UBS’ economist, also highlights the key near-term risks investors are concerned about. Investors, it says, have also questioned the trends in household savings and the local flows in the backdrop of demonetisation READ MORE

Prime Minister Narendra Modi addressing at an election campaign rally in Mangaluru, Karnataka

8:51 AM

Oil near November 2014 highs firm as markets tighten amid OPEC cuts, Iran sanctions

 

Oil prices held firm on Tuesday as ongoing production cuts by OPEC and looming US sanctions against Iran tightened the market amid strong demand.

 

Brent crude futures, the international benchmark for oil prices, were at $78.37 per barrel, up 14 cents from their last close and not far off a three-and-a-half year high of $78.53 a barrel reached the previous session.

8:50 AM

RESULT PREVIEW PNB to report Rs 27 billion loss in Q4

 

Though the bank is expected to have spread the fraud-related provisioning over the four quarters, it is expected to report Rs 26-27 billion of losses in Q4  when it announces its March 2018 quarter results today. “Fraud‐related provisions though are likely to be spread over four quarters, we factor in Rs 60 bn (provisioning) which affects overall operating performance,” analysts at Prabhudas Lilladher, said in a Q4 preview report. With RBI’s permission, banks are allowed to spread fraud-related provisions in four quarters instead of taking a one-time hit.

 

8:45 AM

Poll results will pivot market sentiment

 

The short-term market sentiment could pivot one way or another, depending upon the results in the Karnataka Assembly election results today. If the BJP wins a clear majority that’s likely to super charge the bull run and it may push the markets to new all-time highs. READ MORE

8:40 AM

Market view by Jayant Manglik, President, Religare Broking

 

Markets will react to the outcome of Karnataka elections and the immediate reaction would be on the downside in case of hung assembly. We reiterate our view to let the markets stabilize first after the results and maintain hedged positions in the meanwhile. 

8:38 AM

Nomura on Karnataka poll outcome

Markets could view the Karnataka election results as a litmus test of the BJP’s popularity in the run-up to the next general election (scheduled for April/May 2019), but we do not share this view, because state elections are often dominated by local issues. Second, farm distress has become a political issue and the rural-urban stratification of the Karnataka vote will be important.

In the December Gujarat elections, BJP managed to retain its mandate but suffered heavy losses in its rural constituencies. Not surprisingly, the BJP government has promised farm loan waivers in Karnataka in its manifesto. In the run up to other state and general elections, we expect government policies to remained focussed on improving rural incomes 

8:34 AM

TECHNICAL CHECK ON THE MARKETS

The Nifty opened in green and ended the trading session absolutely flat On Monday. Post the breakout from the crucial resistance level of 10785, the index consolidated above it. The bulls will have an upper hand as long as it sustain above the breakout level of 10785.

On the way up, the index should rise higher towards 10910 i.e. 78.6% retracement level of its previous. On the way down, 10705 – 10600 will provide support in the near term. Overall, the short term trend is bullish as the index is forming higher top higher bottom and is trading above the crucial moving averages. We have a bullish outlook on the index for the short term with a target 10910 and reversal placed at 10500

(Source: Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas)

8:31 AM

Antique Stock Broking on Karnataka polls

We note that (1) exit polls have a chequered history, especially in predicting outcomes of multi-party contests (e.g. UP in 2017) (2) a 80-100 range seat by BJP is possibly baked into expectations and thus markets will be agnostic to such an event (3) a majority for BJP will be a shot in the arm for the markets and positive for risk-on sentiments- cyclicals, INR and 10-year yields.

From a sector perspective, we continue to maintain that it will be a bottom-up market with no sweeping generalisations possible across sectors. We retain our positive bias for pvt retail banks and IT (given the sector is a good hedge against volatility).

8:30 AM

Kotak Securities on Karnataka polls

Karnataka elections: macro and politics versus earnings. Most of the exit polls suggest a hung assembly with BJP poised to be the single largest party in the Karnataka state elections. A victory for the BJP will be received well by the market but a narrow defeat will not dent the market’s optimism regarding the BJP’s chances in the general elections next year. The market has pinned its hopes on earnings recovery and largely ignored the deterioration in the macro, which may weigh on heady multiples

8:26 AM

Karnataka poll: 4 of 7 exit polls bet on BJP

Nearly 70 per cent of the 49.6 million electorate in Karnataka voted on Saturday to elect a new Assembly. As the voting ended at 6:30 in the evening, four of the seven polling agencies predicted in their exit polls that the Bharatiya Janata Party (BJP) would emerge the single-largest party. READ MORE

8:24 AM

Karnataka polls wipe out Rs 4 billion of OMC revenues

 

With the electoral battle for Karnataka over, oil-marketing companies (OMCs) on Monday started recovering their revenue loss by hiking prices of petrol by 17 paise and diesel by 21 paise. The freeze on retail prices since April 23, however, meant that the OMCs had to let go up to Rs 350 million per day, according to a Business Standard analysis based on the average consumption of both fuels.

8:21 AM

Karnataka assembly polls: Satta bazaar bets big on BJP

The satta bazaar is shortening the odds on a BJP win in Karnataka, even though a third party may eventually feature in the victorious combine. According to ET, bookies expect the BJP to win 96-98 seats in the Karnataka Assembly, while the Congress may get 85-87 seats. In market parlance, this means bid price is 96 or 85, while the ask price is 98 or 87 GET ALL LIVE UPDATES HERE

8:20 AM

ALERT Counting begins for Karnataka assembly polls. Early trends indicate a close fight between the Bharatiya Janata Party (BJP) and Indian National Congress (INC)

8:17 AM

INTERVIEW Congress win in Karnataka may test 10,000 on Nifty, says Jigar Shah, CEO, Maybank Kim Eng Securities

Are the markets factoring in the possibility of Bharatiya Janata Party's (BJP’s) loss in the upcoming Karnataka assembly election? 

 

The markets are not yet factoring any possibility of an NDA (National Democratic Alliance) loss in the Karnataka assembly elections. They would be nervous and may test the recent 10,000 level on the Nifty50 again if there is an outright Congress win. However, if it is a hung assembly, it may go down only marginally because the trend cannot be extrapolated on a national basis. A favourable outcome, on the other hand, will be an absolute majority to the BJP in which case the market should hold its level CLICK HERE FOR THE FULL TEXT