Ahead of the impending results of the Gujarat Assembly election — held in two phases on 9 and 14 December, the markets and Sensex in particular, had taken a hit in the first could of hours of counting.
Sensex down by 600.51 points, currently at 32,862.46. Nifty at 10,134.35
— ANI (@ANI) December 18, 2017
However, the situation seems to have stabilised with the Sensex revovering by 400 points.
The volatile nature of the stock markets will continue for a couple of days, said AK Prabhakar, head of reserach, IDBI Capital. Once the results are out, whichever way it goes, stocks will rally, he said. After that, he expects the Nifty to gradually touch 10,800 by the first week of January. "There is a huge local liquidity flow which will balance the market at lower levels. If market correction happens in a big way, say five to six percent, there are huge funds waiting to buy into the market," he said.
The stock markets appear disappointed with the latest trends coming from Gujarat. Punters were betting on a clear, huge BJP win but with the Congress putting up a tough fight against the incumbent, sheer nervousness has gripped the bourses. The benchmark Sensex tanked 800 points in the intrad-day market before recovering later. This is largely a kneejerk reaction and things could return to normalcy if the BJP pulls off a victory at the end of the day.
What happens in Gujarat today will set the agenda for stock markets in the near term. Traders will be praying for the exit poll predictions to come true and that the BJP wave continues in Gujarat. That's because if the exit polls get it right and the public mandate favours the BJP, that would be an endorsement of Narendra Modi's policies and signal political stability. On the contrary, if pollsters get it wrong, there could be a short-term bloodbath in the markets.
Updated Date: Dec 18, 2017 10:09 AM