A BJP win in UP positive for Dalal Street? How analysts are reading Assembly polls

Will the return of the ruling BJP in UP spell good news for the market?

Devarsh Vakil, Deputy Head of Retail Research, HDFC Securities:

"As predicted by the exit polls, the market was expecting the BJP to garner a majority in Uttar Pradesh. Markets hate uncertainty and the outcome of these state elections will provide policy continuity and stability. Based on this mandate, the central government will be buoyed to carry out their agenda confidently and look for opportunities to pursue economic reforms."

"In the past, clear political mandates have led to euphoria though that is unlikely to be the case this time around. Macroeconomic variables are not that conducive for markets to experience a surge in indices as higher crude oil prices have stroked inflation fears. Central bankers around the globe are unwinding their loose monetary policies and raising interest rates, and that will keep markets on the check at higher levels across the globe, including in India."

AK Prabhakar, Head of Research, IDBI Capital Markets:

"Uttar Pradesh is a very important state for the government. Wining the northern and western regions is very important for the BJP as they are weak in the eastern and southern parts of the country."

"The reform process would continue, which is important for the market."

VK Vijayakumar, Chief Investment strategist, Geojit Financial Services:

"The outcome of state polls, particularly a decisive victory for the BJP in Uttar Pradesh, is positive from a market perspective."

"However, the dominant theme influencing the market in the short to medium term would be the outcome of the conflict in Ukraine and monetary tightening by the Federal Reserve."

Ajay Srivastava, Dimensions Corp Finance Services:

"I don't think it makes a difference to the market, but it makes a difference to the confidence and I think the confidence is really good at this point of time... With the victory of the AAP in Punjab, you come to the point where every party will have to start focusing on delivery on the ground. I think, this is quite a nice message from the people to the government, to say: 'listen, we like stability but if you don't give us economic prosperity, you could be at risk'."

"I think it's a great story playing out in the democracy, great for the economic policy, great for the market, because this gives a message very clearly that gentleman, 'you are on watch... everything is on the table therefore don't take us for granted'."

GV Giri, Head of Research, IIFL Institutional Equities:

"I think there are bigger influences at this point. We probably will not be hit with a double whammy. For now, (state) elections become a non-issue... The more the market is going to be faced with significant uncertainty on the geopolitical front, the lesser elections matter for now."

Brijesh Bhatia, Senior Research Analyst, Equitymaster:

"The market is trending based on geopolitical news as well as state election results. The bulls are heaving a sigh of relief with the Nifty having recovered more than six percent from the low of 15,671. It has risen to 16,700+ levels on the back of a big short-covering rally."

Ravi Singh, Vice President and Head of Research, Share India Securities:

"The market has already responded to the outcome of state elections far in advance of official results. The BJP-led administration is on the verge of gaining a clear majority in one of the most politically crucial states in India, Uttar Pradesh. Other states with the exception of Punjab are also indicating favourable advances for the BJP. However, the market's resurgence is attributed not just to state elections but also to developments in the Ukraine situation."

"The election effect appears to be transient, but if the Ukraine situation continues to improve, we may witness a market reversal. To indicate a definite trend reversal, the Nifty must remain above 16,800 for a few days."

Ravi Singhal, Vice Chairman, GCL Securities:

"The results are in accordance with market expectations... There will be no additional market effect from this point.".