Markets may open negative, Karnataka poll outcome to set the direction

Indian benchmark indices are expected to open with modest losses as the cues from the Asian peers are mostly soft. In a very important and significant cabinet reshuffle, Smriti Irani was moved out of the I&B ministry and Rajyavardhan Rathore will take charge of the I&B ministry, while Piyush Goyal will take additional charge of the Ministry of Finance till Arun Jaitley recovers from his illness. Market participants will wait for the outcome of Karnataka assembly elections as it will dictate the movement of the market. Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could open lower by 14 points at 10,795.  

Most Asian indices are trading in the red on Tuesday. Hong Kong’s Hang Seng has slipped 0.76% followed by Japan’s Nikkei 225 which has dipped 0.01%. while China’s Shanghai Composite has added 0.04%.  

Back home, benchmark indices ended almost unchanged on Monday as investors remained cautious ahead of Karnataka state election results. After a lacklustre start, markets traded in a slender range, and as the day progressed, Nifty slipped below the 10,800-mark as sentiment damped with WPI-based inflation hitting a four-month high in April. However, a late recovery on the bourses helped both Nifty and Senses to end flat. The broader indices continue to witness selling pressure as Nifty Mid-cap and Small-cap fell 1.19% and 1.32%, respectively. On the sectoral front, it was a mixed performance. Nifty Auto declined the most with loss of 0.87% followed by Nifty Realty and Nifty Media. On the other side, Nifty PSU Bank gained the most, followed Nifty Bank and Nifty Pharma.  

The US stocks pared most of their earlier gains on Monday and ended the session with miniscule gains. The Dow Jones Industrial Average closed higher by 68 points at 24,899, extending the winning streak to eight sessions. The S&P 500 index inched up 2 points to finish at 2,730 and the Nasdaq Composite rose 8 points to end at 7,411.  

The European stocks ended the Monday’s session with modest losses. The focus was on Italian politics. Italy is now headed towards a coalition government between the Five Star Movement and the (formerly “Northern”) “League”, potentially breaking a month of political impasse since the March 4 inconclusive general election. The DAX of Germany dropped 0.18%, CAC 40 of France slipped 0.02% and the FTSE 100 of UK declined 0.18%.