Stock markets in India to bleed more on BJP's Karnataka setback

Between now and these elections, economics will dictate the market direction

The setback suffered by the Bharatiya Janata Party (BJP) in Karnataka will further weigh on the stock market, already grappling with macro economic headwind. The developments there are seen as a key step for galvanising opponents of the ruling party ahead of the general election in 2019.

"The sharp correction (in share prices) that is underway is likely to gather momentum,” said Ajay Bodke, chief executive officer, portfolio management services at Prabhudas Lilladher.

The benchmark indices shed two per cent last week, their worst weekly performance in two months. Investor sentiment was already been fragile amid a worsening macro situation,