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India
11 Dec 2018

Assembly poll results, Urjit Patel's sudden resignation upset market

Sensex tanks over 500pts; Nifty cracks below 10,400

Benchmark equity indices opened with heavy losses today, as investors were on edge ahead of the final assembly election results from five states, amid plummeting rupee after RBI Governor Urjit Patel's unexpected resignation.

The Sensex opened over 500 points lower.

In a similar movement, the NSE Nifty dropped below the 10,400-mark, slumping 144.05 points, or 1.37%, to 10,344.40.

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In context

Sensex tanks over 500pts; Nifty cracks below 10,400
Nifty fell 1.92% to end at 10,488.45 in Monday session

Election effect

Nifty fell 1.92% to end at 10,488.45 in Monday session

The Sensex tumbled 714 points, or 2%, to close at 34,959.72 in Monday's session.

The Nifty too fell 205.25 points, or 1.92%, to end at 10,488.45.

"The markets are already in a downtrend. They have discounted a 3-0 whitewash. If even one state goes the BJP way, it will result in short-covering," said VK Sharma, Head PCG and Capital Markets Strategy, HDFC Securities.

Urjit's resignation

Patel's resignation 'alone can to knock off 200pts from Nifty'

Commenting over Urjit Patel's resignation, Sharma further said, "As far as the RBI Governor's resignation is concerned, it alone has the ability to knock off 200 points from the Nifty."

"Vijay Mallya's extradition order by UK court is positive for the markets, but will provide some cushion only later on when he actually lands in India," he added.

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Urjit resigned four days ahead of pivotal board meeting

Differences

Urjit resigned four days ahead of pivotal board meeting

Besides nervousness over election results, the plunging rupee also weighed on investor sentiment, traders said.

The rupee opened 112 paise, or 1.50%, down at 72.44 after the unexpected resignation of the Reserve Bank of India Governor Urjit Patel Monday, four days ahead of a crucial meeting of the board of the central bank that could have discussed issues of simmering differences with the government.

SEBI and stock exchanges alerted over extreme volatility in market

Capital markets regulator, Securities and Exchange Board of India (SEBI) and the stock exchanges, have stepped up their surveillance systems to keep manipulative forces in check, amid an extreme volatility expected during the day due to Patel's resignation and the state assembly results.

Forecast

Declining votes can trigger a bigger loss for the market

After a sharp plunge of over 700 points in the benchmark Sensex yesterday tracking the exit poll results for five states, analysts have warned that the final results showing declining votes for the ruling BJP and Patel's resignation could trigger even a bigger loss for the markets today.

Top losers in the session were IndusInd Bank, Reliance Industries, ICICI Bank, HDFC, Adani Ports.

FPIs bought shares worth Rs. 116.22 crore today

FPIs

FPIs bought shares worth Rs. 116.22 crore today

Other losers in the session were Kotak Bank and Hero MotoCorp, falling up to 4%.

While, Yes Bank bucked weak market trend, rising up to 5%, SBI and NTPC were other gainers.

Meanwhile, Brent crude, the international benchmark, was trading 0.27% up at $60.13 per barrel.

On a net basis, foreign portfolio investors (FPIs) bought shares worth Rs. 116.22 crore today.

World market

Trade in Hong Kong was flat, Japan's dropped 0.56%

On the other hand, domestic institutional investors (DIIs) were net sellers to the tune of Rs. 145.80 crore, provisional data available with BSE showed.

Elsewhere in Asia, Hong Kong's Hang Seng was flat, Japan's Nikkei dropped 0.56%, while Shanghai Composite Index was up 0.28% in early trade.

On Wall Street, the Dow Jones Industrial Average index rose 34.31 points, or 0.14%, to 24,423.26 yesterday.

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