Gold Silver Reports (GSR) – At least four exit polls, including Today’s Chanakya, which accurately predicted Modi’s victory in 2014 elections, showed the BJP as the single largest party winning anywhere between 95 to 120 seats in the 224-member Karnataka assembly. The incumbent Indian National Congress — also the main federal opposition party — is seen bagging 72 to 99 seats.
Indian markets are expected to be volatile Monday as exit polls indicate that majority may prove elusive for Prime Minister Narendra Modi’s Bharatiya Janata Party in elections in a key southern state.
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“Margin of victory is the most important factor and with the exit polls indicating all kinds of permutations and combinations, the markets are definitely going to be volatile,” said Avinash Gorakshakar, head of research at Mumbai-based Joindre Capital Services Ltd. “Having said that, a conclusive BJP win can push the Nifty above 11,000 this week and a Congress victory can see the gauge drop as much as 400 points.”
Investors fear an inconclusive verdict could prompt the federal government to take populist measures to shore up public support ahead of nationwide elections in 2019. Markets will cheer an outright win for BJP as a vindication of a slew of reform measures — including a nationwide sales tax and a funding plan for state-owned lenders — that prompted the first sovereign rating upgrade from Moody’s Investors Service in 14 years.
Exit Polls predict that the Janata Dal (Secular), a regional party led by former Prime Minister H.D. Deve Gowda, will be kingmaker in case of a hung assembly in Karnataka, which has a population equivalent to that of France. – Neal Bhai Reports (NBR)
