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Surprise Twist In Karnataka Elections Deflates Sensex Rally: 10 Points

Karnataka election results: The Sensex traded in the range of 35,993 and 35,497 during the day.

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Surprise Twist In Karnataka Elections Deflates Sensex Rally: 10 Points

Karnataka election results: Sensex and Nifty rose over 1 per cent at day's high.

The Sensex and Nifty ended flat today amid uncertainty over government formation in Karnataka. Though the BJP has emerged as the biggest party in the Karnataka elections, it is still short of majority, according to the latest trends. The Congress is making a bid to form a coalition government and has quickly arrived at an understanding with former prime minister Deve Gowda's regional party, the Janata Dal Secular. The Sensex settled 12 points lower at 35,543 while Nifty finished at 10,801, off 5 points. During the day, the Sensex rose nearly 450 points at day's high - trading between 35,993 and 35,497 - before paring most of the gains. The rupee also fell sharply today to 67.90 against the US dollar. The market breath also turned negative with BSE midcap and smallcap stocks also coming under strong selling pressure.
Here are 10 updates from stock markets
  1. In the near term, volatility will persist until there is certainty of who forms the government in Karnataka, says a market analyst. 
  2. Pharma, auto and capital goods stocks led the losses today.
  3. Among Nifty 50 stocks, Tata Motors slumped over 4 per cent while SBI and Coal India fell over 2 per cent.
  4. Among gainers, Tata Steel, TCS, Power Grid and Bajaj Finance rose between 1.5 per cent and 2.5 per cent. 
  5. VK Sharma, head private client group & capital market strategy at HDFC Securities, said the Karnataka elections will be soon behind for markets. "The markets will now be more reactive to the international cues, which are a matter of concern specially the rising crude and dollar," he said.
  6. Kotak Institutional Equities said that market's focus will increasingly shift to macro and earnings. Inflation data released on Monday showed that retail inflation accelerated in April to 4.58 per cent, after easing for three straight months, mainly driven by faster hikes in fuel prices.
  7. Devendra Kumar Pant, chief economist at India Ratings, said: "It is difficult to state whether or not the Reserve Bank of India will change rates based on these numbers. As long as inflation is hovering between 3.5 per cent and 4.5 per cent, I do not expect the RBI to intervene."
  8. Hindustan Unilever ended 0.7 per cent higher after the diversified consumer goods maker reported an about 14 per cent rise in profit on Monday, helped by higher sales in its home care business.
  9. Fortis Healthcare shares rose nearly 3 per cent after Manipal Hospital and private equity firm TPG Capital Management sweetened their bid to buy the hospital chain. 
  10. The breadth of the market was negative with 1,611 stocks declining on the BSE and 1,028 advancing.


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Highlights

1
Broad-based gains were witnessed led by banking sector
2
The rupee also recovered from recent 15-month lows vs dollar
3
HUL shares also joined in the rally.

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