Indian stock markets are poised for an exciting week starting from Monday (March 6), thanks to the culmination of a long-drawn election schedule and the commencement of speculation. If exit polls forecast a victory for the Bharatiya Janata Party is Uttar Pradesh, markets sentiments could get a boost. The actual results will be announced on March 11.
In the high-stakes elections for the 403-seat Uttar Pradesh Assembly, both the primary contenders — the BJP and the Samajwadi Party-Congress — are addressing rallies in Varanasi, the district that goes to polls in the last phase next Wednesday.
The city is playing host to multiple rallies and roadshows by the parties — Prime Minister Narendra Modi and the respective leaders of the coalition (Akhilesh Yadav of Samajwadi Party and Rahul Gandhi of Congress).
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Central government employees can also look forward to some good news with regard to hike in their allowances, as recommended by the 7th Central Pay Commission, since the restrictions placed by the model code of conduct will be lifted after polls are over.
The last round of the seven-phase elections to five states ends on Wednesday (March 8) and exit poll results by various agencies will be out the next day, coinciding with the commencement of the second half of the Budget Session of Parliament.
The exit poll results, normally out on the last day of polling, will be delayed by a day since voting at one seat each in Uttarakhand and Uttar Pradesh will take place on March 9.
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Shares are most likely to rally if exit polls predict a victory for the BJP in Uttar Pradesh as a BJP win would be seen as a positive for the BJP-led NDA at the Centre. The significance is because the state sends 31 members to the Rajya Sabha, where the NDA is in a minority.
On the other hand, if exit polls forecast a victory for the Samajwadi Party-Congress combine, it would dampen sentiments for markets since it would be seen as a setback to the Narendra Modi government.
The last round of polls in Uttar Pradesh would see voting in seven districts for 49 seats, including Varanasi, which is Modi's parliamentary constituency. He is in the temple town and is all set to address a rally to make a last-ditch effort at galvanising support for his party.
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The Budget Session of Parliament, reconvened after the presentation of Union Budget 2017-18, will start from next Wednesday and end on April 12, 2017.
Apart from taking up the Finance Bill 2017, the Parliament will also discuss other critical legislations including the draft laws for Goods and Services Tax (GST). On Saturday, the GST Council cleared the Central GST and Integrated GST laws.
On Friday (March 3), the BSE Sensex closed seven points lower at 28,832 while the NSE Nifty shed two points to end at 8,898.
Hindalco was one of the top gainers on BSE on account of its successful QIP in the price band of Rs 183-189 per share. The issue size was about $500 million.
On Friday, Hindalco shares closed 4.83 percent higher at Rs 198.65 apiece, almost close to their new 52-week high of Rs 199.90.
The Indian rupee closed 11 paise lower at 66.81 to the US dollar on Friday.
India's foreign exchange reserves ended $63 million higher at $362.79 billion for the week ended February 24, 2017.