Karnataka election results, macro data, crude prices key for markets this week
Markets are likely to stay volatile as investors are waiting for Karnataka election results on Tuesday and key consumer price inflation data
Mumbai: The markets are likely to stay volatile as investors are waiting for outcome of Karnataka state elections on Tuesday.
Analysts said rising crude oil prices and global markets will also remain in focus amid geopolitical tensions in the Middle East following US President Donald Trump’s announcement to withdraw from the Iran nuclear deal, and escalating tensions between Iran and Israel.
Sanjeev Zarbade, vice president of PCG Research at Kotak Securities Ltd, said, “Going into the next week, the focus would be the Karnataka elections which could result in some volatility. There is also macro data to be announced on IIP and CPI, which may move markets. Focus would also be on crude prices as Iran Nuclear deal is now off the table. Given the deterioration in macro data points, investors would do well to stay invested in companies that are delivering healthy earnings growth”.
According to a Mint report, out of the five major Karnataka exit polls released on Saturday, only one said that Bhartiya Janata Party (BJP) will get simple majority, while three have predicted a hung assembly. Only one predicted a Congress majority.
Meanwhile, Punjab National Bank, Reliance Communications, Hindalco Industries, ITC, JSW Steel,Tata Steel, Ashok Leyland and Bajaj Auto will announce their March quarter earnings this week.
Jimeet Modi, founder and CEO of SAMCO Securities, said that, although everyone is looking out for outcomes in the Karnataka elections which might have insignificant effect on the market, the real threat may emerge from the Iran-Israel conflict which can escalate into a war-like situation after the withdrawal of US from the nuclear deal with Iran.
“High crude prices and a strong dollar are a bad omen for the bulls and therefore the markets should remain under pressure given the uncertainties,” he added.
The market is likely to react to the weak industrial output data released on last Friday. The index of industrial production (IIP) grew 4.4% in March against a downward revised 7% increase in the previous month. The consumer price inflation (CPI) and wholesale price inflation (WPI) for April will be released this week.