150 seats in Gujarat for BJP can take Nifty to 10,700 levels, say analysts

STOCK MARKET are likely to remain choppy over the next two trading sessions as they react to the exit poll outcome (Friday) and the counting of votes (Monday) for the recently held assembly elections in Himachal Pradesh and Gujarat.

After a stellar rise of around 26% thus far in calendar year 2017 (CY17), the benchmark indices - S&P BSE Sensex and the Nifty 50 - have remained flat with a marginal fall of 0.22% each in December.

Going into the state election results, opinion polls suggested that the Narendra Modi - led Bharatiya Janata Party (BJP) will wrest control from the Indian National Congress (INC) in Himachal Pradesh (HP) and will retain Gujarat, although with fewer seats than in 2012.

The outcome of the state elections, experts say, is likely to be viewed as a referendum on Prime Minister Modi's performance, especially the implementation of goods and services tax (GST) bill and could have an impact on future economic policy decisions.

"The base-case scenario is that the BJP will win in Gujarat, albeit marginally. Anything dramatic will see the markets sway sharply on either side. Traders have taken positions (both long and short), which will need to be covered. As a result, the index movement will get magnified," says U R Bhat, managing director, Dalton Capital Advisors.