On Monday, people of 72 constituencies in nine states exercise their franchise in the fourth phase of the Lok Sabha Elections. This is the last phase for Maharashtra, where 17 seats are up for grabs, including six constituencies from India’s financial capital, Mumbai.
Stock market veterans come out to vote in Mumbai on Monday as the voting in the fourth phase of the 2019 Lok Sabha elections. The Indian stock markets were closed today on account of the general elections.
Bharat Iyer of JP Morgan spoke about the Lok Sabha elections and shared his views and readings on the market.
The last opinion polls before voting got underway seem to suggest that the National Democratic Alliance (NDA) would get about 270-280 seats, Iyer said.
"The UPA was perhaps being tipped to get about 150 seats with other regional parties getting the balance. That is where the market is set at this point in time," he said
“I guess anything meaningfully short of what the market is pricing in right now, would constitute a negative surprise, particularly if the verdict is less than 250 seats,” Iyer added.
On markets, Iyer believes that markets will eventually revert to fundamentals. He said, “There could be a bit of volatility for 2-3 days around the results depending on how the verdict goes.”
“We still remain constructive over the medium term. The good part is that corporate earnings seem to be staging a smart recovery. For the first 9 months of the current fiscal year, earnings have grown at 13 percent. The fourth quarter should if anything be better because you have a very favourable base effect. We are looking at about 18 percent for next year as well. So, corporate earnings are the big story as far as we are concerned,” he added.
According to him, there will be volatility but the market is not going to purely focus on the election results.