{"id":78769,"date":"2018-05-19T14:46:11","date_gmt":"2018-05-19T14:46:11","guid":{"rendered":"http:\/\/www.bnreport.com\/bjps-karnataka-debacle-to-spoil-mood-on-dalal-street-but-knee-jerk-reaction-may-be-shortlived-say-analysts\/"},"modified":"2018-05-19T14:46:11","modified_gmt":"2018-05-19T14:46:11","slug":"bjps-karnataka-debacle-to-spoil-mood-on-dalal-street-but-knee-jerk-reaction-may-be-shortlived-say-analysts","status":"publish","type":"post","link":"https:\/\/www.bnreport.com\/en\/bjps-karnataka-debacle-to-spoil-mood-on-dalal-street-but-knee-jerk-reaction-may-be-shortlived-say-analysts\/","title":{"rendered":"BJPs Karnataka debacle to spoil mood on Dalal Street; but knee-jerk reaction may be shortlived, say analysts"},"content":{"rendered":"<p> NEW DELHI: BS Yeddyurappa-led BJP&#039;s failure to prove majority on the floor of <a href=\"https:\/\/economictimes.indiatimes.com\/topic\/Karnataka\" rel=\"noreferrer\" target=\"_blank\">Karnataka<\/a> assembly on Saturday is all set to trigger a kneejerk reaction on Dalal Street when trade resumes on Monday.  <\/p>\n<p>Analysts said the market is going to <a href=\"https:\/\/economictimes.indiatimes.com\/topic\/open\" rel=\"noreferrer\" target=\"_blank\">open<\/a> with a downward gap but should recover the same day. <\/p>\n<p>Yeddyurappa, who took oath as Karnataka Chief Minister, resigned on Thursday, skipping the trust vote. The outcome is being seen as a big setback for the BJP. <\/p>\n<p>The Supreme Court had on Friday ordered advancing of a scheduled test of majority for the new government, modifying Karnataka Governor Vajubhai Vala&#039;s earlier order allowing the party 15 days to prove majority. <\/p>\n<p>&quot;The market might already have discounted the event as we saw a breach of 10,600 on the Nifty50 on Friday. We may see a small gap-down opening, which will be equally bought into after the first hour of opening session,&quot; said Sanjiv Bhasin, EVP-Markets &amp; Corp Affairs, at IIFL. <\/p>\n<p>It&#039;s just a political setback. It may not have any major implication for the market, said G Chokkalingam, founder and CEO, Equinomics Research &amp; Advisory. <\/p>\n<p>&quot;What matters to the market is whether the ruling government will come back to power in 2019. To that extent, BJP has already doubled its seats in Karnataka. The outcome will have only a knee-jerk reaction,&quot; Chokkalingam said.  <\/p>\n<p>BJP had won 104 seats in the recently concluded <a href=\"https:\/\/economictimes.indiatimes.com\/news\/politics-nation\/karnataka-elections-2018-news-updates\" rel=\"noreferrer\" target=\"_blank\">Karnataka elections<\/a>.  <\/p>\n<p><a href=\"https:\/\/economictimes.indiatimes.com\/topic\/Ajay\" rel=\"noreferrer\" target=\"_blank\">Ajay<\/a> Bodke, CEO and Chief Portfolio Manager PMS at Prabhudas Lilladher noted that the market is more concerned over the adverse fallout of surging global crude oil prices on India&#039;s macroeconomic fundamentals and slow take-off in corporate earnings.  <\/p>\n<p>The sharp correction that is under way may gather momentum, he said. <\/p>\n<p>The <a href=\"https:\/\/economictimes.indiatimes.com\/indices\/sensex_30_companies\" rel=\"noreferrer\" target=\"_blank\">Sensex<\/a> lost 687.49 points, or 1.93 per cent for the week to settle at 34,848.30 on Friday. NSE barometer Nifty50 dropped 210.10 points, or 1.94 per cent, during the week to close at 10,596.40, thanks to deteriorating macro cues and political uncertainty. <\/p>\n<p>While INC and JD(S) formed alliance soon after the election outcome, it was BJP which was first invited by Governor Vala to prove majority. INC and JD(S) which together won 116 seats in the state elections cried foul and approached the SC to stop Yeddyurappa taking oath as Chief minister but the apex court refused to stay the swearing-in ceremony. <\/p>\n<p>Later a three-judge bench headed by Justice AK Sikri ordered floor test on Saturday after hearing a Congress-JDS petition. <\/p>\n<p>Karnataka is Indias fourth largest state in terms of the size of the economy and boasts of a literacy rate in excess of 75 per cent. The state accounts for 28 per cent of countrys biotech companies, 12.7 per cent of Indias total exports of goods and services, and is the birthplace for a large number of startups. The state holds 28 seats in Lok Sabha and 12 in Rajya Sabha.  <\/p>\n<p>&quot;Swinging political fortunes in the Karnataka elections, being the most watched out event of the year, popular media opinions and perceptions were so heated that to the common man the election outcome would have felt like a make-or-break event,&quot; said Jimeet Modi, CEO &amp; Founder, Samco Securities. <\/p>\n<p>&quot;Mr Market is far more mature and is really not bothered about the outcome of the state elections, save the short-lived kneejerk reactions,&quot; he said. <\/p>\n<p>Bodke advised investors to stick to companies with stable, steady and visible earnings growth in sectors such as retail-focused private banks, FMCG, retail and automobiles. <\/p>\n<p>&quot;Investors need to tread with caution in sectors such as aviation, logistics, OMCs and tyres,&quot; he said. <\/p>\n<p><a href=\"https:\/\/economictimes.indiatimes.com\/definition\/Volatility\" rel=\"noreferrer\" target=\"_blank\">Volatility<\/a> is likely to remain high amid negative global cues and FII selloff but it should be used to add stocks that are expecting faster earnings recovery and hope to benefit from government spending, rural spending and consumption revival, Teena Virmani, Vice President \u2013 Research at Kotak Securities said in a weekly note. <\/p>\n<p>&quot;Although a falling rupee and expectation of strong near-term demand has propelled many mid-cap IT companies to new highs their valuations appear stretched. Headwinds in pharma sector would continue to cap the upside. Corporate focused banks would continue to reel under high provisioning requirements for atleast 2 more quarters and are best avoided,&quot; Bodke added. <\/p>\n<p><strong><a href=\"https:\/\/blockads.fivefilters.org\/\" rel=\"noreferrer\" target=\"_blank\"><\/a><\/strong> <a href=\"https:\/\/blockads.fivefilters.org\/acceptable.html\" rel=\"noreferrer\" target=\"_blank\"><\/a><\/p>\n<p><a href=\"https:\/\/economictimes.indiatimes.com\/markets\/stocks\/news\/bjps-karnataka-debacle-to-spoil-mood-on-dalal-street-but-knee-jerk-reaction-may-be-shortlived-say-analysts\/articleshow\/64235457.cms\" rel=\"noreferrer\" target=\"_blank\">Original Article<\/a><\/p>\n<p>[contf]<br \/>\n[contfnew]<br \/>\n        <img decoding=\"async\" src=\"https:\/\/img.etimg.com\/photo\/60278104.cms\"\/><\/p>\n<h5><a href=\"https:\/\/economictimes.indiatimes.com\/\" rel=\"noreferrer\" target=\"_blank\">ET Markets<\/a><\/h5>\n<p>[contfnewc]<br \/>\n[contfnewc]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>NEW DELHI: BS Yeddyurappa-led BJP&#039;s failure to prove ma..<\/p>\n","protected":false},"author":1,"featured_media":78770,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[202],"tags":[],"class_list":["post-78769","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>BJPs Karnataka debacle to spoil mood on Dalal Street; 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