oppn parties How Will The Poll Results Affect The Stock Market?

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  • Centre asks states to give shelter and food to migrant workers to stop them from taking to the streets
  • RBI cuts repo rate by 75 bps, the steepest in 10 years
  • Centre writes to states regarding laxity in monitoring people who had arrived from abroad between January and March
  • Kerala reports a spurt in new cases
  • With 124 fresh cases on Friday, the number of reported cases in India stand at 854
  • Five of a family, including a 9-month-old-baby test positive for Covid-19 in Nadia district in West Bengal on Friday
  • The Pakistani army is reportedly forcibly moving all Covid-19 patients to PoK and Gilgit
  • Untimely azaans in J&K mosques spark panic gathering
  • Stocks rise - Sensex up by 1400 points and Nifty goes above the 8600 mark
  • Rahul Gandhi says the economic package is "the first step in the right direction"
  • The government announces wide-ranging measures to help the poor overcome the economic hardship caused by Covid-19
  • G20 leaders to hold a virtual meeting today to explore ways of fighting Covid-19 in a coordinated manner
  • The Delhi government orders testing of all medical staff after the positive test on a Delhi mohalla clinic doctor
  • As a fallout of a Delhi mohalla clinic doctor testing positive for Covid-19, 900 people in the chain quarantined
  • China offers help to India in the fight against Covid-19 and says India will win the battle at an early date
Death toll reaches 27 as Covid-19 cases across India reach 974 on Saturday
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How Will The Poll Results Affect The Stock Market?

By Linus Garg
First publised on 2019-05-22 11:33:56

About the Author

Sunil Garodia Linus tackles things head-on. He takes sides in his analysis and it fits excellently with our editorial policy. No 'maybe's' and 'allegedly' for him, only things in black and white.
The stock markets dropped yesterday after touching record highs on the day exit polls predicted a comfortable majority for the NDA. That day, stocks had shown the highest single day jump in 10 years. But most analysts say that the drop yesterday was on account of profit taking and is not a reversal of the uptrend. In fact, they say that if results mirror the exit polls, the Nifty well might breach the 12000 level or even inch close to 12500.

To support their theory, analysts point out to the open interest being shown by traders at 12000 and even 12500 levels. They say that since no trades are being squared up for these levels – in fact, trades are being added – it is clear that the market is going to move upwards and touch dizzying heights. Only a complete reversal of the trends shown in the exit polls will cause a crash in the market. Analysts feel that given that most exit polls show a similar trend of majority for NDA, such a scenario is unlikely.

But what should a small trader do in such a scenario? The markets are already at very high levels. One feels that apart from a small rally, the markets have already taken in the fact that the NDA will return again ensuring policy continuity. But exit polls have gone wrong in the past. A small trader is more likely to burn his fingers at these levels if he or she does not do his homework properly. The chances of making money in the short term are decidedly low. Hence, small traders will find it better not to invest until a clearer trend emerges.