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Sensex Set For Choppy Start as Bihar Exit Polls Unclear

The BSE Sensex and Nifty are likely to open on a positive note on Friday, but markets are expected to be choppy because Bihar election exit poll results, telecast late evening on Thursday, failed to throw up a clear winner.

based on six different polls, showed a photofinish between the Nitish Kumar led ‘Grand Alliance’ and the BJP in the Bihar assembly election. Votes will be counted on November 9.
Though Bihar assembly election results will not impact national politics, they will influence the market’s perception of reforms, according to said Bank of America Merrill Lynch.

Fund manager Vivek Pandey tweeted, “BJP loss is already factored in Nifty… So, on 9th if results come out against BJP, Nifty wont fall below 7,800. But if BJP wins, Nifty may rise above 8,500.”

Markets have been choppy in the run-up to the last few rounds of voting in Bihar, with the Nifty correcting around 300 points over the previous nine sessions.

Though markets are likely to be choppy in the short term, analysts say Bihar elections are unlikely to have a lasting impact on reforms or for that matter markets too.

“If the BJP loses, the markets may come off a bit, but in the ensuing weeks if PM Modi positions the defeat as a need for change, for much faster progress on the economic reform front, on the need to get the economy revived on a much faster clip – then the stock markets will react to the quite favourably,” said Saurabh Mukherjea of Ambit Capital.

The earnings season, another key event for stock markets, has been tepid, with many blue-chip companies missing Street estimates. Tata Steel’s Q2 numbers looked better on asset sales, while drugmaker Cipla disappointed the Street on Thursday. State-run ONGC, PSU banks SBI and Bank of Baroda, and automakers Tata Motors and M&M will report their Q2 numbers today.

Power stocks will be in focus as the government on Thursday approved a rescue package for loss-making power utilities. Power Minister Piyush Goyal said states would be allowed to take over 75 per cent of the debts of their utility companies, which now stand at Rs 4.3 lakh crore after years of undercharging customers for electricity.

As of 08.30 a.m., Nifty futures on Singapore Exchange traded 0.2 per cent or 16.50 points higher at 7,988.50.

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