Exit polls and markets: Beware! Play the expected euphoria with caution

It will be interesting to see how the new government will generate additional revenues to fund populist schemes already announced without dampening the market mood.

Markets remained highly volatile during last week with the Nifty conquering the 11,400 mark after threatening to go below 11,100 early in the week. It started the week on a pessimistic note, after IIP contracted to 0.1 per cent in March 2019, the lowest in 21 months. Continued selling by the FIIs ahead of the General Election outcome and the prevailing trade war tensions between US and China kept the market nervous. Sentiments got further hit after Indian Met department’s announcement of a late arrival of monsoon, dampened the early revival prospects of consumption focused sectors.

However, later in the