The Maharashtra Election 2024 has been one of the crucial factors for the markets. Maharashtra is not just a major industrial hub but also accounts for nearly 13-14% of the country’s GDP. It attracts over 30% of FDO and the policitical future of the state is something that India Inc and stock markets are keeping a close eye on. The markets have corrected nearly 10% from recent highs and most experts believe that a clean sweep by the opposition could extend the correction phase significantly.
Maharashtra Elections 2024: Not a big factor at the moment
A close look at trade over the last few days indicate that investirs have been in wait and watch mode and there has been some profitbooking too.
Market veteran, Nilesh Shah, Managing Director – Kotak Mahindra Asset Management explained that there may not be a big impact if it is a close contest-
“No material impact is expected in case of a close contest. If opposition does a clean sweep than yes markets will correct a little more”
According to Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services, “Markets are likely to consolidate for some more time. Q3 earnings and Budget expectations are going to be the next big triggers. The state election result is a small factor. This is not a make or break election for the market. Real estate and clutch of other industries governed by state policies may see some sentiment reaction but no long-term impact. The key economic policies are mostly decided by the Centre. In the current market environment, the major concern is the geo-political situation over next few days along with Crude prices . Inflation is a key concern back home. Possibilities of the Chinese economy remaining under pressure could turn the FII outflow tide. Rate cut is unlikely anytime before February- that’s another crucial trigger.”
Maharashtra Elections 2024: Key Nifty, Sensex levels to watch
The market sentiment is currently negative and analysts expect some short-term impact if the Maharashtar Election results are not on expected lines.
Vinod Nair, Head of Research, Geojit Financial Services highlighted that, “”Profit booking was also seen ahead of the upcoming Maharashtra state election. The recent correction in valuation suggests a potential pause in further price erosion. However, the recovery will depend on an uptick in earnings which is likely to rebound due to the likely spurt in central and state expenditure in H2.”
In terms of Nifty levels- analysts believe that 23000 is an important floor for the Nifty and the break below that may extend the correction phase. Akshay Chinchalkar, Head of Research, Axis Securities pointed out that “23,350 will be a key swing low that bulls will have to protect. Immediate resistance will be the area of the prior swing lows between 23820 – 24000. Breaking below the 200-DMA two days ago did not create any follow through selling. Any subsequent break of 23,350 with 24,130 holding will mean 23,200 will come into play.So, in summary, it is biased towards the advance extending in the near-term within the 23350 – 24130 window.”