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After initial euphoria over BJP’s projected win in Karnataka, stock markets slip as party’s lead shrinks

According to market observers, broadly subdued Asian indices, and disappointing macro-economic inflation data points released on Monday capped gains.

Reported by: IANS, Mumbai [ Updated: May 15, 2018 17:26 IST ]
Image Source : PTI IMAGE

Representative Image.

With changing fortunes of the Bharatiya Janata Party (BJP) in Karnataka assembly results, the stock market’s reaction also kept changing throughout the day.
 
The BSE Sensex surged over 436 points in early trade when the BJP was heading for a clear majority in the Assembly in early trends. 
 
However, the Sensex lost all its gains and ended marginally lower by 13 points at 35,543.94 after the poll trends suggested that the BJP might not be able to reach the magic figure of 112 in the assembly on its own.
 
Besides, weaker global cues and sluggish rupee added to the subdued sentiments on the bourses.
 
Late selling in realty, PSU and infrastructure stocks mainly dragged the market from early highs. 
 
Towards the fag-end of the session, both key indices Sensex and Nifty entered the negative terrain reacting to the reports that the Congress would offer support to the JD(S) to form the government in Karnataka. 
 
Trends suggest Narendra Modi-led Bharatiya Janata party (BJP) is leading, but is still short of majority in Karnataka. 
 
As per latest poll trends, the BJP was leading on 106 seats, while congress was ahead on 76 and JD(S) on 38. 
 
Investors who had created huge position after early trends on hopes of BJP win trimmed their bets after the saffron party seat prospects shrank. 
 
Also, the rupee slipped to fresh 16-month low of 67.92 (intra-day) against the dollar. 
 
The 30-share BSE index hit a high of 35,993.53 in morning trade. Later, it met with profit-booking at higher levels and slipped in the negative zone to hit a low of 35,497.92, before settling 12.77 points, or 0.04 per cent to 35,543.94. The gauge had gained 310.44 in the previous two sessions. 
 
The 50-share Nifty reclaimed the key 10,900-mark to touch a high of 10,929.20 in initial trade and fell back by 4.75 points, or 0.04 per cent, to end at 10,801.85. It touch a low of 10,781.40. 
 
Meanwhile, foreign portfolio investors (FPIs) bought shares worth a net Rs 717.99 crore while domestic institutional investors (DIIs) bought shares worth Rs 687.23 crore yesterday, as per provisional data. 
 
Globally, Asian markets ended mixed and European markets opened lower.

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