Profit booking in equities likely post polls: Bernstein
"Despite the opinion poll data making the 390-400 target look almost certain, we believe the gain of seats in low penetration states may not significantly exceed the loss in others," said Bernstein's analysts Venugopal Garre and Nikhil Arela in a client note.
Mumbai: Brokerage said could see after the and the results will be the trigger. The firm said with "sky-high expectations" about the seats that the BJP-led National Democratic Alliance () would secure in the elections having set in, a number near to the 2019 outcome might trigger a short-term negative reaction."Despite the opinion poll data making the 390-400 target look almost certain, we believe the gain of seats in low penetration states may not significantly exceed the loss in others," said Bernstein's analysts Venugopal Garre and Nikhil Arela in a client note.
The brokerage said some polls go as high as 411, and given the recent performance in state elections and the results of almost all major opinion polls, 390-400 seats have become the new base case.
"A correction is inevitable, and markets that are simply looking for a reason to fall may overreact to a sentiment that may not mean much rationally," said the analysts. "On the face of it, 300 seats will still mean the ruling party getting the absolute majority, and a construct similar to 2019, which is, in fact, a continuity of power as well as a continuity of extent of power. Still, it will be seen as a 'below consensus' result, and a reaction cannot be denied. This can eventually start the end of the current market frenzy, which has lasted for a full year."
Source: Stocks-Markets-Economic Times
