Even as the 30-share Sensex reacts negatively to the Karnataka election outcome as the Narendra Modi-led BJP failed to cross the half-way mark, CLSA says that the party\u2019s test to form government in the state remains elusive. According to the firm, BJP has regained some political momentum by becoming the single largest party in the state. CLSA said that the central and state government\u2019s stance may become more pro-rural. Possible freebies will mean that the country\u2019s macros maybe under pressure, the report said. However, the stock markets will eventually shift its focus back to fundamentals, said CLSA. \u00a0 \u201cThe Karnataka elections got built up as a big event although its impact on the markets it limited. Markets today are grappling with twin forces, there is revival in the economy and corporate earnings on one hand and adverse macro factors like a falling INR and rising crude prices on the otherside. On balance risks are on the downside at this stage. After a corrective move markets could again become interesting from long term investors perspective,\u201d investment advisor Sandip Sabharwal told FE Online. CLSA notes that the next set of elections is only in December. Macros and the earnings do not appear exciting currently, it said. A recent UBS report had said that investors are pricing a Modi win in 2019, as the base case, and Karnataka state election outcome will act a near-term sentiment indicator. Analysts and stock market experts had expected the markets to rally, in case of a BJP victory in the state. \u201cI think any indication that the same government will continue in 2019, the markets will like it. That is what seems to be happening in the last couple of days. Any hypothesis which supports a possibility that NDA government will return, the market will like that. Anything contrary to this and market will not like it and will correct,\u201d Vikas Khemani, President and CEO, Edelweiss Securities told in an interview to ET Now on Monday. CLSA said that it\u2019s an ideal time to increase weightage in consumption sector. The firm suggests to increase weight in M&M and HDFC Bank.