Anticipating the change of regime due to early morning leads, the markets gained over 500 points, eventually to tumble to end flat over the confusion over government formation in Karnataka. The trading concluded with the BSE Sensex dropping modest 12.77 points while Nifty lost 4.75 points to stand at 35,543.94 and 10,801.85 respectively.
“Domestic stocks began the trading day on a buoyant note as initial trends showed the BJP taking a huge lead in Karnataka. The general opinion is that a BJP victory in Karnataka will revive hopes of Narendra Modi forming the government again in 2019, which is important for the follow up of important economic reforms taken up in the recent past. However, markets gave up all of their gains to finally close the day near the flat line”, says Anand Shah- Deputy CEO and Head of Investments at BNP Paribas.
The trading session ended with Tata Steel, Powergrid, Bajaj Finance, TCS and Asian Paints being the top gainers while Tata Motors, State Bank, Coal India, Sun Pharma, India Buls Housing Finance and NTPC being the top losers.
On the sectoral basis, the performance according to Shah was mixed. “While the IT, metals and private banking indices registered some gains, the auto, media and PSU banking indices traded with losses,” he says.
Furthermore he adds, “Increasing inflation print has caused concern in some corners of the investor community. The all-India general CPI inflation increased to 4.58% in April 2018 (new base 2012=100), compared with 4.28% in March 2018, snapping consistent moderation for last three months.” This he believes has mirrored on markets today.
In broader markets, BSE Midcap and small cap both ended red as the indices closed 0.81 and 0.65 percent down respectively. Mid Cap concluded at 16068.57 while the small cap closed at 17525.45 points.
In the markets across Asia and the world, Nikkei and Hang Seng lost 0.21 and 1.23 percent respectively while Shanghai Composite concluded 0.57 percent high. At the time of writing this piece, FTSE 100 was up by 0.29 percent, DAX trading flat and S&P 500 had closed 0.09 percent up on the previous day.
Meanwhile, among in the commodity section, gold lost 0.05 percent by closing on Rs 31,489 while crude oil prices in the international markets gained 1.67 percent to end at Rs. 4,874.
The 10 year Gsec benchmark yield hardened to conclude on 7.9061..