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

News Snippets

  • The government decides to decriminalize more than two-thirds of penal sections in the Companies Act
  • Muslim groups tell the Supreme Court that they want the Babri Masjid to be restored
  • Muslim groups claim that while they were asked questions in court, Hindus were not questioned
  • Postpaid mobile services restored in Jammu & Kashmir from today, but still no internet
  • Abhijit Banerjee, an Indian-American currently a professor at MIT, wins the 2019 Noble prize in economics jointly with two others
  • Industrial output slumps in August as the IIP shrinks by 1.1%
  • Prime Minister Modi and Chinese President Xi Jinping watch a cultural show at the Shore Temple in Mamallapuram
  • J&K administration lifts the ban on entry of tourists in the Valley, but it remains doubtful how many will visit without being able to use mobile phones and internet
  • After Sena asks members to support the BJP candidate in Kalyan, 26 party corporators and 300 members resign setting off a crisis
  • The Centre sets up a 12-member committee to suggest systemic changes in the GST structure to improve compliance and collection, prevent misuse and evasion and rationalize rates and slabs
  • In line with the RBI outlook on the Indian economy, rating firm Moody's also downgrades growth forecast from 6.8% to 5.8% this year, saying the economy is experiencing a pronounced slowdown
  • HDFC chairman Deepak Parekh says the financial system in India does not offer foolproof security for misuse of the savings of the common man
  • Shivinder Singh and Malvinder Singh, promoters of Ranbaxy and Fortis, arrested for their role in Religare Finvest scam
  • Supreme Court says marriage can be dissolved if it has broken down irretrievably
  • DA of Central government staff hiked by 5% to 17%
Sourav Ganguly is the new president of BCCI, says conflict of interest is a big concern
oppn parties
How Will The Poll Results Affect The Stock Market?

By Linus Garg

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.