Markets end lower ahead of exit polls; banks, metals dip

13 May 2009

The benchmark indices ended lower, after seeing extreme volatility throughout the session, ahead of the exit polls in the evening and election results on May 16, 2009. Profit booking was seen in shares of oil & gas exploration, infrastructure, technology, banking and metal companies. The Nifty touced the 3700 mark again during the day and the Sensex closed above the 12,000 level.

Among the frontliners, Reliance Industries, ONGC, SBI, NTPC, TCS, SAIL, Infosys, HDFC Bank, ITC, Reliance Communication, Tata Steel, ICICI Bank and Sterlite were the draggers, slipped 1-4%.

The 30-share BSE Sensex shut shop at 12,019.65, down 1.14% or 138.38 points, after seeing a swing of 322 points between an intraday high of 12,256.43 and low of 11,934.44. The 50-share NSE Nifty closed 1.25% or 45.85 points lower at 3,635.25; it swung 99.4 points between day's high/low of 3709.60 and 3610.20, respectively.

Today was the last day of polling and in the evening, the process of exit polls will start, where people will get some idea that who will be frontrunners for forming a government. This was the main reason behind today's choppiness. Experts believe that the volatility will continue till the forming of the government.

R Balakrishnan, Investment Analyst said, "Now people would like to wait and watch. We would see a extreme bouts of volatility and the key is not as to who forms the government but when is the decision going to clear as to the government getting formed. Because the way you look at it, coalitions are not new to the market and every party has been in some kind of power or the other over the last 8-9 years. So the time lag between the results and the government forming and the cabinet getting announced is going to be extremely sharp and volatile. The best is to just stay away, keep your money."

Sudarshan Sukhani of Technical Trends said, "We will see a lot of volatility as we reach the election results day and subsequently, and this is just a sample or a trailer of what we can expect in the next few days. So it's not just another choppy session, it's the sessions that are going to happen again and again because of a big news event. The wise way to trade it is to stay away from the markets."