Sebi, Exchanges And Investors: All Gear Up For Polls D-Day


A final decision is yet to be taken on additional trading hours, a senior official said, adding that so far SEBI has not been inclined to do so as there have been no precedents and such a move may be construed as interfering in the normal market making activities.

The Sensex has already galloped over 7 percent in this calendar year to 22,688.07, with capital goods, banking, consumer durables and automobile firms' shares clocking double-digit gains.

However, there is also a possibility of a hard-landing on May 16 if the outcome differs from expectations of a result favorable to the coming of a stable government.

In past one month or so, index for a defensive sector like healthcare has surged 3.5 percent dwarfing Sensex's 2.8 percent gain -indicating that smart money in markets is ring-fencing itself.

Unpredictability of election outcomes in India, given fragmented polity and dynamic voter base, coupled with the fact that opinion polls went wrong in the last two national elections (2004, 2009) remains an overhang.

"In the run up to the outcome of general elections on May 16, the next few trading sessions are likely to be very volatile," according to research conducted by Aditya Birla Money, which has advised clients a mix of cyclical and defensive stocks.

Listing out a possible scenario, foreign financial major Morgan Stanley in the second week of this month said if the elections produce a fragmented coalition government, the equity market could revert to quality stocks, and "technology and pharmaceuticals could be the major outperformers" and the INR could lose more than 10 percent.

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Source: PTI