Polls to keep market on tenterhooks: StanChart

With no clear mandate emerging from exit polls for the next government formation, the markets are likely to remain jittery until the new government is formed but no sustained economic fallout is expected, Standard Chartered has said.      

According to a research report by the global financial services major, the market would keenly await the strength and composition of the new coalition government.      

"We maintain that even in the worst-case scenario, a short-term impact on markets is more probable than any sustained economic fallout," Standard Chartered Bank economist Anubhuti Sahay said in the report.      

According to results of various exit polls for the Lok Sabha elections, the Congress-led ruling UPA alliance is estimated to have got a lead over the other groupings, including BJP-led NDA, but the margin is very small.     

With none of the parties expected to win a simple majority (50 per cent or 272 seats), a hung parliament is widely expected, the report stated.    

"Thus, it is key to watch the strength and composition of the new coalition government coming into power. Markets may remain on a nervous footing during the interim period from 16 May to early June, when the new government will be formed," it added.