Sensex, Nifty may open sharply lower as state poll outcome, Urjit Patel exit weighs; Key things to know

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Published: December 11, 2018 8:53:37 AM

The domestic stock markets are likely to open sharply lower after RBI governor Urjit Patel’s exit and ahead of the crucial state elections outcome. We take a closer look.

While the Sensex shed 713.53 points to close the session at 34,959.72, the broader Nifty pared 205.25 points to end at 10,488.45 to erase its entire gains for the year so far.

The domestic stock markets are likely to open sharply lower after RBI governor Urjit Patel’s exit and ahead of the crucial state elections outcome. Mr. Urjit Patel’s resignation as RBI’s Governor may create temporary flutter in the markets that are waiting expectantly to know which way the citizens of 3 crucial Hindi Heartland States have voted, Ajay Bodke of Prabhudas Lilladher said in a note. “Global headwinds like escalating trade war between US & China, Britain’s Parliamentary vote on Brexit and fears of slowdown in global economic growth in 2019 has already led to a sharp spike in risk aversion for risk assets like equities,” Ajay Bodke,CEO & Chief Portfolio Manager – PMS, Prabhudas Lilladher added. .

Also read: Share market LIVE Updates: Sensex, Nifty may open sharply lower after Urjit Patel’s exit; state poll outcome eyed

Earlier, SGX Nifty was trading sharply lower at levels around 10,340 versus Nifty December Future’s Monday close of 10,515, indicating an extremely weak opening for the Indian stock markets today. Asian markets failed to hold gains from Wall Street as both Japanese & South Korean equities were trading near low point of the day. Major US indices ended positive on Monday as Dow Jones staged a smart recovery by erasing a 500-point drop in another whipsawing session on Wall Street.

In an interview to ET Now, Harsha Upadhayaya of Kotak AMC said that election outcome will weigh on the sentiment in the short run, and stock market will continue to remain volatile. “In the very short-term, liquidity and investor sentiment drag the markets, but in the longer term usually fundamentals take over. As far as we are concerned, a lot of factors impacting economy have turned favourable now. The only factor left out is the state elections, followed by its likely impact on the general elections. Our sense is during this period, the stock market is likely to continue to remain volatile,” Harsha Upadhaya of Kotak AMC told ET Now.

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