Image: Arijit Sen / Hindustan Times via Getty Images
With four states—Karnataka, Chhattisgarh, Madhya Pradesh and Rajasthan—going to polls before the 2019 general elections, the markets are bracing themselves for an interesting phase. Experts say earnings growth will determine stock market trends, and not events like the Karnataka elections of May 12. The results will be announced on May 15.
“Nobody expects the BJP to get a massive majority. However, if it wins, the markets will respond favourably,” says Saurabh Mukherjea, CEO of Ambit Capital. “Market and investment trends will be determined by future earnings growth, which could touch double-digits, for the first time in five years, in FY19.”
The Congress has been in power in the state since 2013. “The Karnataka polls are important to us. Although we are politically-neutral, there is an impact on us based on how the government runs the state,” says Amit Agarwal, co-founder and CEO of NoBroker, a Bengaluru-based online real estate startup. “We hope the state regulatory bodies will be startup friendly, non-intervening and supportive.”
A Balasubramanian, CEO of Birla Sun Life Mutual Fund, says: “Stock markets have started to ignore the outcome of assembly elections, unless it is completely different from the past.”
The stock markets have been volatile in 2018, with the Sensex gaining just 3.2 percent to 35,176.42 points, as on May 3, and the Nifty is up just 1.77 percent in the same period.
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(This story appears in the 25 May, 2018 issue of Forbes India. To visit our Archives, click here.)