Market stares at gap-up opening; Exit polls put BJP victors

With the results of exit polls showing the Bharatiya Janata Party (BJP) having an edge over the Congress in the five Assembly elections held in November and December, it is expected that markets would open firm on Thursday. However, gains could be capped as market participants will wait for the final verdict on state assembly polls on December 8.  

For Chief Minister Sheila Dikshit who was attempting to make a desperate attempt to retain her government after 15 years in power, her New Delhi constituency surprisingly recorded the highest voter turnout well above 70 per cent.

Wednesday’s polls, culminates the election process in the five states with results slated for Sunday (December 8).

If exit polls are anything to go by, the Bharatiya Janata Party (BJP) is likely to come to power in at least three — Rajasthan, Madhya Pradesh, Chhattisgarh — of the five states where Assembly elections have just ended, leaving the Congress huffing and puffing to reach the victory mark in Mizoram alone.

For Delhi, the polls on Wednesday veered between a hung House prediction and a slim majority for BJP. No poll saw the Congress even close to returning to power in the capital.

According to the exit polls, the Aam Aadmi Party (AAP), contesting its maiden election, may win between 6 and 31 seats in the 70-member Delhi House.

Nifty futures on the Singapore Exchange (SGX Nifty) was trading at 6296 up almost 94 points suggesting a gap-up opening today.

Asian markets are lower today as Chinese and Hong Kong shares fall. The Shanghai Composite is off 0.16% while the Hang Seng is down 0.37%. The Nikkei 225 is not trading.

US Stocks remained mixed on Wednesday as market participants tried to make sense of better-than expected economic reports and gauge the mindset of the Federal Reserve.

The Dow Jones Industrial Average and the S&P 500 indices ended marginally lower, while the Nasdaq managed to churn moderate gains. The Dow and S&P 500 have fallen for the past four days.

Dow Jones industrial average was off 24.85 points, or 0.16 percent, to close at 15,890 levels while the S&P's 500 Index was down 2.34 points, or 0.13 percent, to finish at 1,792.81. But the Nasdaq Composite Index inched up just 0.80 of a point, or 0.02 percent, to close at 4,038

British telecom giant Vodafone will invest $3 billion (Rs 18,605 crore) in India over the next two years to expand its network, especially in rural areas, group chief executive Vittorio Colao said on Wednesday. The proposed investment, about 15 per cent of the group's global investment, is its biggest spending worldwide and excludes the expenditure for buying spectrum in India.

Canadian Pension Plan Investment Board (CPPIB), one of the largest pension fund managers in the world, plans to partner Indian companies in various sectors to tap the growing demand here.

CPPIB, which manages funds worth $180.9 billion (about Rs 11 lakh crore) of 18 million Canadian pensioners, is looking for opportunities in infrastructure, private equity (PE) and debt-funding, among others.

CPPIB had announced a joint venture with Mumbai-based conglomerate Shapoorji Pallonji Group last Thursday to buy into foreign direct investment (FDI)-compliant, ready office buildings in major Indian cities. It has committed $200-million (Rs 1,200-crore) investments in the venture.

The pension board is also reportedly planning to float a real-estate, non-banking financial company (NBFC) with Ajay Piramal group to lend to realty developers here. CPPIB and Piramal Group are reportedly planning to invest $500 million in the joint venture. CPPIB manages real estate investments worth $20.6 billion (about Rs 1.27 lakh crore).

This may not may not have a direct impact on equity markets but this could point to the optimisim that foreign investors have not turned their backs on India.

Business activity in emerging markets grew at the fastest rate in eight months in November, supported by momentum in Chinese manufacturing activity, a survey showed on Thursday.

The composite HSBC emerging markets index ticked up to 52.1 from 51.7 in October, moving further above the 50 line that divides expansions in activity from contractions even though growth in the services sector stalled at October's seven-month high.

Manufacturers picked up the slack, led by China, where stronger domestic demand drove manufacturing growth to its sharpest increase since March, and also helped by India.

"In India, manufacturing business conditions are turning to positive after a few months of contraction," said Murat Ulgen, an emerging markets economist at HSBC.

Stocks to watch

Mumbai-based consumer goods company Jyothy Laboratories was preparing to make a fresh round of acquisitions in fabric care and personal care by the fourth quarter of the current financial year or early the next, Joint Managing Director Ullas Kamath said.