MARKET OUTLOOK |Election results to determine market moves

Exit polls along with the final verdict of the 2019 general elections will keep the equity investors on tenterhooks in the coming week, experts said.

Accordingly, the seven-phase long 2019 general electionswill conclude on Sunday. Subsequently, exit polls will be released with thefinal results being announced on May 23.

   

“Now investors are closely eyeing exit polls, which isscheduled on 19th May. And this may lead to volatility during the week startingMay 20,” said D.K. Aggarwal, Chairman and Managing Director, SMCInvestments and Advisors.

According to Vinod Nair, Head of Research, Geojit FinancialServices: “After many days of consolidation, Nifty has bounced back from alow of 11,100 which seems to be an intermediate support for the market.”

“However, next week is eventful given exit polls andfinal verdict. Market is likely to be indecisive till final outcome is known,while extension of volatility cannot be ruled out.”

Apart from election related action, global trade and middleeast tensions will be other major drivers for the market. Last week, thepre-election rally in domestic market was cut short by escalation in tradetensions between US and China along with mixed Q4 results and expectation ofconsumption slowdown.

Besides global tensions, the ongoing results season willplay an important role in determining the equity indices’ movement.

Companies like Bharat Forge, Glaxosmithkline Pharma,Hindustan Petroleum Corp, Tata Motors, DLF, Jindal Steel and Power, BEML, IndiaCements and NTPC are expected to announce their Q4 earning results next week.

On the currency front, the Indian currency last weekdeprecated by 31 paise to close at 70.23 against the US dollar from itsprevious week’s close at 69.92 per greenback.

“Next week is a make or break on account of domesticelections exit polls and actual results… markets are factoring a BJP ledcoalition coming to power, any different result can be a big disappointment. Apositive outcome may lead to a moderate rally in markets,” said SajalGupta, Head Forex and Rates, Edelweiss Securities.

“Expect the rupee to trade between 69.20 to70.80.”

In terms of technical charts, the NSE Nifty could headtowards the next major supports of 11,227-11,180 points in the coming week.

“Technically, with the Nifty reversing the recentuptrend and entering into a new downtrend, the index could now head towards thenext major supports of 11,227-11,180 in the coming week,” said DeepakJasani, Head of Retail Research for HDFC Securities.”Any pullback rallies could find resistanceat 11,358-11,457.”

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