Karnataka-based companies cheer election outcome
Share prices of several Karnataka-based companies like Infosys, Mphasis, BEML and Biocon, among others, have seen a boom in today’s trade, after the state reinstated a stable mandate in the Karnataka assembly elections.
Ensuring political stability in the country with one party enjoying the majority played a role in improving market sentiment.
Companies across sectors have seen share prices skyrocket. Bengaluru-based IT companies did well in the stock market on Monday. Infosys closed down 1.6 percent at INR 1,258.75 and Wipro closed up 0.81 percent at INR 386.35. Mid-tier IT company Mphasis closed down 0.74 percent at INR 1,866.
Similarly, drug major Biocon’s scrip closed 0.96 percent higher at $247.45, Sobha real estate closed 11.54 percent higher at $552.85, and major spirits company United Spirits closed 1.31 percent higher at $806.
Public Sector Enterprises (PSUs) BEL and BEML also closed higher. While BEL closed 0.37 percent higher at INR 107.70, BEML closed 2.46 percent higher at Rs 1,410.
Markets are positive
According to analysts, Congress returned to power in Karnataka with a clear majority in 135 out of 224 constituencies on May 13. This indicates that the state will spare itself the problem of the repercussions of the disintegration of the mandate, as happened in 2018.
Ensuring the vision of a stable government and not wanting a power shift halfway was one of the factors that prompted the stock market to react positively on Monday.
FPIs will continue
Analysts said that foreign portfolio investors will continue to invest in India, despite the BJP’s loss of Karnataka state.
Dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said: “Although the Congress victory in the Karnataka elections was much better than expected, it is unlikely to have a negative impact on the markets, which was mainly driven by near-term inflows. Foreign investment in inbound margins is supported by improved fundamentals. Karnataka has a strong track record in voting favorably for incumbents. Election results are unlikely to dent the NFIs.”