Nifty may open lower on AAP effect

Market considers AAP's victory as a bearish factor because it indicates first significant political setback for PM Narendra Modi

The National Stock Exchange benchmark, the Nifty, is expected to open lower on Monday after exit polls on Saturday said the Aam Aadmi Party (AAP) would form the government in Delhi.

Sources in the grey market, also known as dubba trades or kerb deal market, said the Nifty will probably open 40-50 points lower.

The Sensex is expected to open 140 points lower. On Friday, Nifty futures closed at 8,716 points.

AAP’s victory is seen bearish in the short term because it shows the first significant political setback for Prime Minister Narendra Modi since the BJP’s sweeping victory in the parliamentary polls in May 2014.

A grey market trader in Rajkot said, “We see the Nifty opening lower on Monday but it has to be seen how long it will remain subdued, as the market has already corrected a lot in the last few days.”

Power stocks might also fall. The AAP had promised cheaper power to consumers. Reliance Power is already trading around a 52-week low.

Dubba traders have became cautious, as investors and operators have made losses due to a sharp upturn and later a steep fall in the Nifty and Bank Nifty and its components, including power stocks.

Many traders are now operating only during market hours, unlike earlier.

In Ahmedabad, a trader said, some punters had on Saturday taken bets for the Nifty at 8,500.