NEW DELHI: The stock markets ended up reversing early gains on Tuesday as the results of the assembly elections in Karnataka saw no clear winner being picked. Analysts pointed out that Tuesday’s trends indicate that many investors have already priced in Bharatiya Janata Party (BJP) victory in the 2019 Lok Sabha elections.The BSE Sensex closed the day marginally down by 12.77 points, (0.04 per cent), while the NSE Nifty ended the day down by 4.75 points.
However, the start of trading on Tuesday saw markets surge as early trends indicated that the BJP would have a simple majority in the 224 seat assembly. Despite the dampened sentiments seen during the end of the day, the 30-share Sensex surged over 436 points in early trade and the NSE Nifty soared nearly 128 points before making a U-turn in the afternoon, as it became clear that no party would have a simple majority.
“The markets had a good start led by positive impression of Central ruling government in the Karnataka election, but lost its aura as lack of clear majority emerged by the end of the day. Whatsoever be the final outcome, this will give more depth to the market as concerns over the performance of BJP in the next general election of 2019 will reduce,” said Vinod Nair, Head, Research, Geojit Financial Services Ltd.
Meanwhile, global factors also played spoilsport, with weak Chinese economic data and a lack of progress on trade tariff issue between the US and China further hitting investor sentiments. To add to the markets’ woes, the rupee plummeted by 52 paise in intra-day to trade at 68.03.