Impact of UP election results on the market: At a time when crude oil is at several-year high, Uttar Pradesh state elections could bring more volatility to D-Street in the short term. The Uttar Pradesh election results to be declared today, March 10, may act as a major short-term sentiment for market investors as it will indicate the public sentiment of the single largest political state towards the ruling party both at the Center and in the state. .
Roop Bhutra – CEO, Investment Services, Anand Rathi Shares & Stock Brokers, said: “Out of the five states, markets are primarily eyeing the results of UP and how the current government performs in terms of seats won. At present, the markets are expecting the incumbent government to come back to power with a majority.”
More volatility on the cards?
Narendra Solanki, Head-Equity Research (Fundamentals), Anand Rathi Shares & Stock Brokers said: “With the state election results declared tomorrow, the markets may also react to the results and see some volatility as the counting of votes continues. Huh. Proceeds during the day. With UP being the most important of the five states, the market will be watching the results of the UP election and its impact on the national discourse.
What will the current government’s return to the road mean?
The two-day bull run, which investors are currently cheering for due to today’s UP Assembly election results, could swing either way. Nishit Master, Portfolio Manager, Axis Securities, said: “If the BJP does not come to power in UP, the markets will assume that the results of the 2024 Lok Sabha elections could be shocking, and create uncertainty in the minds of investors. However, we expect the feedback to be restricted for a few days.”
However, if the current government is unable to retain power in the state, there could be a knee-jerk reaction among investors. Partha Nyati, Founder of Tradingo, said: “If BJP does not come to UP we will see a knee reaction in the market towards the 15,500 level, but after that the direction of the market will depend on the global situation.”
Market experts believe that at present the market is more worried about the skyrocketing crude oil prices. Nyati said that “the UP election is considered important from the market point of view as it is a major state defining political situation and it could have brought a big change in the market if there was no major global event”.
The major impact of the election results will be in the form of hike in fuel prices. The government has been keeping fuel rates stable for more than four months so far in view of the assembly elections in five states, including Uttar Pradesh. Earlier, there were reports that imminent hike in petrol and diesel prices has been put on wait-and-watch mode for more clarity on global oil prices.
Meanwhile, the market is also worried about the Fed policy meeting, which is due next week.
This is reflected in the India VIX, a measure of market volatility expected in the near term, which has been ruling in the 29-30 range for the past one week. The index was ruling at a level of 20.6 in mid-February and at 16.45 at the beginning of the year.
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