Mumbai, May 15: The market fell sharply from its day’s high to end below the flatline amid uncertainty over formation of the government in Karnataka after election results.
The 30-share BSE Sensex slipped 437 points from day’s high to end down 12.77 points at 35,543.94 while the 50-share NSE Nifty managed to hold the 10,800-mark, down 4.70 points at 10,801.90.
BJP was likely to be largest party in Karnataka Assembly with lead in 104 constituencies but was away from the half-way mark while Congress was leading in 78 seats and JDS in 38 seats at the time of writing this article.
In a surprise turn of events, the Congress said it will extend support to the Janta Dal (Secular) in forming the next government in Karnataka. JD(S) Tanveer Ahmed said HD Kumaraswamy has been offered the Chief Minister position by the Congress while the BJP has reached out to the JD(S) for a post poll alliance.
“Though the BJP dramatically improved its performance from the last elections, reports that the Congress was ready to provide support to the JDS, the indices slipped,” VK Sharma, Head Private Client Group & Capital Market Strategy at HDFC Securities said.
It’s an event that is now out of the way, he added.
He feels the markets will now be more reactive to the international cues, which are a matter of concern specially the rising crude and dollar.
Meanwhile, the rupee extended losses in second half of session and hit more than 16-month low as the dollar strengthened against major global currencies on hopes for easing global trade tensions that pushed US bond yields higher.