After jumping more than 250 points in the early trade, the Sensex fell over 100 points on October 24 on profit-booking in select IT, bank and auto heavyweights.
Investor sentiment was roiled by trends of Maharashtra and Haryana assembly poll results. The ruling BJP was on course to win Mahrashtra but Haryana was increasingly looking like a hung house.
“It’s not landslide victory for BJP, as expected. This would certainly impact the stock market in the short-term,” said Shrikant Chouhan, SVP-Technical Research, Kotak Securities.
In the long run, the market would look at or would remain excited about steps towards reforms, such as addressing corporate issues and supporting PSUs like the railways, BSNL and MTNL, Chouhan said.
“The market always gives more weight to reform process and how the government tackles major issues. Reforms would bring confidence to the market. On this ground, the government seems committed. Those who have missed the boat may come to invest in declines,” he said.
Sameer Kalra, Founder, Target Investing, is also of the view that the BJP’s performance in Maharashtra and Haryana disappointed the market.
“There is a mild profit-taking because of BJP’s not-so-impressive show in the assembly polls. However, it is a short-term impact,” he Kalra.
Gaurav Dua, Head, Capital Market Strategy, Sharekhan, said there was some impact on the sentiment of investors but it will be short-lived.
“BJP’s assembly poll performance will weigh on sentiment for the short-term. The earnings and reforms will remain the major trigger. Earnings, so far, have been mixed and it will have a stock-specific impact,” Dua said.
However, some market experts said the assembly outcomes were not a significant trigger.
“I don’t think the assembly election results have a bearing on the market. In fact, I see it better as it may push the government to work harder and push reforms more aggressively,” said Pankaj Pandey, Head of Research, ICICI Securities.
G Chokkalingam, Founder of Equinomics Research & Advisory, also said the assembly election outcome was not a major trigger.
“The assembly poll outcome is not relevant at this juncture. The Central government has a lot of time to continue with reforms,” Chokkalingam said.
The Sensex was 34 points down at 39,025, while the Nifty was 17 points down at 11,587 at noon.
Infosys, IndusInd Bank, Bharti Airtel, Mahindra & Mahindra and State Bank of India were among the top drags on the Sensex.
Assembly Election 2019 Results Updates:
Catch Maharashtra Election Result 2019 updates, news and views here
Catch Haryana Election Result 2019 updates, news and views here
Catch Bypoll Results 2019 updates, news and views here
For full coverage, click here.The Great Diwali Discount!
Unlock 75% more savings this festive season. Get Pro for a year for Rs 289 only.
Coupon code: DIWALI. Offer valid till 10th November, 2019 .