MP Rajasthan Election Results Among Key Factors For Stock Market Direction in 2019

December month has some unpredictable election results of MP, Rajasthan, Chattisgarh and Mizoram coming out on 11th December. Let’s see how the New Year is going to treat us and the other factors that may affect the 2018 closing market bell.

Impact of Election Results in MP and Rajasthan

With elections around the corner in the major states of India Chhattisgarh, Rajasthan, Madhya Pradesh and Mizoram, the investors have become uncertain about how the market will react. The opinion polls have painted the picture of positivity for saffron party in the state of Madhya Pradesh owing to its social welfare activities, improved roads, and increased power supply, but the experts are of view that BJP has lost its sheen in Rajasthan on anti-incumbency factors like youth unemployment, farmer suicides, caste based identity politics.

The Modi government further took the election decibels up by attacking the Congress government over Christian Michel’s extradition issue and not remembering the names of political leaders properly. Rahul Gandhi also took a dig at PM by referring him as suit boot ki sarkar and alleging him as a mean, corrupt political leader and for his derogatory remarks for Sardar Vallabhai Patel.

The opinion poll has already declared BJP as a clear winner in Chhattisgarh and MP, but it seems the government has not performed upto the expectations in Rajasthan elections. So, in case the Congress wins the election, the market could react negatively and there are chances that it could breakout to a narrow price band of 10,200 and 10,800.

But what if the Modi government forms an alliance with other parties? Well, that would turn out to be a curious case of political warfare. But we can precisely conclude that volatility will continue to dampen the market sentiment.

Other factors that may are adding to the sharp losses are RBI decision to link retail loans with an external benchmark by replacing MCLR, Global inflation, cracking of rupee and strengthening of dollar, low growth estimated, reduced credit availability and high financing costs. If that’s not enough, even FII are losing the grounds because of inconsistency and political uncertainty.

Sensex and Nifty are already under pressure with strong resistance levels therefore, investors must be praying for BJP to win atleast MP and Chattisgarh. Congress win in these states might fade some shine of stock market closing bell for 2018.