Exit polls predict BJP win in UP, but Dalal St euphoria to fade away soon

Like Bihar elections, this event would also be forgotten by the markets within a week, analysts say

Exit polls have predicted a victory for the Bharatiya Janata Party (BJP) in the key state of Uttar Pradesh (UP) that is being dubbed as the semi–final to the 2019 general elections, and appeared to be too close to call.

Over the past few sessions, the markets have been moving sideways, consolidating the 9% gain made thus far in calendar year 2017. Analysts say the outcome could create distractions (or positives) for the government and will be interpreted as a referendum on the government’s demonetisation drive.

Here is a quick compilation of what the leading market experts think about the possible outcome and its implication for the economy and markets:

Also Read : Election Results 2017


The exit polls have predicted significant improvement for the ruling party at the Centre. If this prediction becomes true, it could be sentimentally positive for the equity markets for a week or so. However, in our view, fundamentally speaking, whether the ruling party wins or loses, it doesn’t have significant relevance for the markets.

The ruling party has a comfortable majority in the Lok Sabha to rule the country for the next two years, which is a long time for the stock markets. Of course, the elections to the UP state are relevant for attaining the goal of majority in the Rajya Sabha for the ruling party. However, most important point is that there is no solid economic reform (from the context of stock markets), which is pending for the majority support in the Rajya Sabha. Even the toughest one viz., GST, has already gone through all major hurdles.

Hence, the market valuation or individual stocks and continued flow from the FIIs would be the dominant factors, which would decide the course of market directions ultimately, rather than the “state elections outcome”. Therefore, like Bihar elections and the Budget, this event would also be forgotten by the equity markets within a week or so.


Our latest checks in Delhi suggest that policy-making in India is likely to continue being ad-hoc if the BJP emerges victorious in UP with no specific over-arching ideology informing economic decision-making. Moreover, expert opinion is likely to continue being given a low priority with political motives guiding economic decisions.


We do not believe that outcome of state elections can be a big development for the market. Bharatiya Janata Party (BJP) is expected to win in UP (the only election that matters in this round, if at all). Even if BJP does not win, we don’t think that investors will project this to derive conclusions about 2019 national elections. If BJP wins as expected, the market will have more reasons to go up for sure CLICK HERE FOR THE FULL STORY


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