Markets are not factoring in Karnataka poll outcome yet, say analysts

Market have not yet priced in the possibility of a loss for the Narendra Modi-led Bharatiya Janata Party (BJP) in the upcoming assembly election in Karnataka. Though analysts expect a knee-jerk reaction to the outcome on May 15, they believe the markets will start focussing on other global and domestic events soon after.

Nilesh Shah, managing director at Kotak Mahindra Mutual Fund believes the S&P BSE Sensex could dip sharply if the BJP loses Karnataka. He, however, expects the recovery to be equally swift. A win, on the other hand, could take markets higher.

assembly election, karnataka election, elections, union election, BS election “Markets are not factoring in a loss for the Bharatiya Janata Party (BJP) in Karnataka yet. On the contrary, there are reports that suggest that the BJP will win – and probably that’s why the S&P BSE Sensex was able to cross the 35,000 mark in April. That said, stability should return after a knee-jerk reaction, as the markets will look at events beyond the Karnataka election outcome,” he says.