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Indian markets on Monday opened over 1% lower as Bharatiya Janata Party lost in key states and covid cases continued to rise rapidly.

At 9.40 am, the benchmark Sensex fell 1.18% to 48,329 points, while Nifty declined 1.2% to 14,515 points.

"The election results can be seen as a setback to the ruling party since it fell short of its expectations. But it is unlikely to influence the markets in any way. The market will be swayed by the crucial covid and economic data. While the news regarding infections, deaths, non-availability of hospital beds and oxygen continue to be grim, there is hope in the declining trend of infections in Maharashtra, particularly Mumbai, and Delhi. If this trend continues perhaps, we have left the peak of the second wave behind," said V.K. Vijayakumar, chief investment strategist at Geojit Financial Services.

The results of Kerala, Tamil Nadu and West Bengal have been in line with exit poll projections, the scale of the All India Trinamool Congress’s (TMC's) victory in West Bengal has belied all predictions. At the outset, the results underline discernible pro-incumbency, with current chief ministers being returned to office convincingly in three out of the four states. And even in the fourth, Tamil Nadu, the AIADMK’s better than expected performance can be attributed to the incumbent chief minister’s record in office, Hindustan Times reported

GST collections in April at Rs1.41 trillion, analysts expect, is very good news indeed. This indicates a strong rebound in the economy and maturing of the GST system, analysts add.

"Market participants would be keenly watching out vaccination progress at private hospitals. Further, despite putting enhanced mobility restrictions by states, manufacturing and infrastructure activities have not halted yet and companies appeared to be proactive this time to convince most workers to stay back by offering basic amenities and facilities. Therefore, a large economic damage like last year is unlikely to happen", said Binod Modi, head-strategy at Reliance Securities.

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