Assembly polls likely to alter market outcomes

At a time when most participants have their eyes glued to the upcoming Union Budget doc, the market direction over the next few months, however, may actually be decided by the outcome of the Assembly polls in Punjab, Uttar Pradesh (UP), Goa, Uttarakhand and Manipur which will kick off on February 4.

We believe the outcome of the crucial polls to be announced on March 11, could create distractions (or positives) for the government in the Centre as it will be interpreted as a referendum on the demonetisation drive.

In a recent co-authored report, the senior vice president and co-head for Research at ICICI Securities, Ravi Sundar Muthukrishnan says, "The outcome will boost NDA's strength in the Rajya Sabha. It will also have a bearing on Presidential elections later this year." 

The head of research at India Infoline Finance Limited, Amar Ambani observes, "Forthcoming five state elections this year are crucial, as the populace will judge the recent economic and political developments. Though the impact of demonetisation will be a key narrative, these ballots will serve as an implied referendum on Modi's development agenda. Indisputably, the outcome of the elections in the most populous state of Uttar Pradesh will pave the path for 2019 elections."