Android
BANNED
- Joined
- Sep 29, 2011
- Messages
- 4,872
- Reaction score
- -4
- Country
- Location
The BSE Sensex fell as much as 535 points on
Monday on fears that Aam Aadmi Party's victory
in Delhi assembly elections would pave the way
for populist policies in the national capital.
Shares of power utilities such as Tata Power and
Reliance Infra, which run distribution companies
in Delhi, came under sharp selloff.
The Sensex and Nifty closed lower for the
seventh straight session as exit polls showed a
majority for the Aam Aadmi Party. Votes will be
counted on Tuesday. ( Read)
"Today's correction is a knee jerk reaction to the
exit polls giving majority to Aam Aadmi Party in
Delhi," said Alex Mathew, head of research at
Geojit BNP Paribas Financial Services.
AAP's earlier policies have been anti-corporate
and a win in Delhi could give a boost to other
socialist parties, analysts told NDTV. ( Read)
AAP's policies such as more subsidy on power
and water and its opposition to some reforms
such as foreign direct investment in retail, have
struck a sour note with investors, analysts say.
As Delhi's Chief Minister for 49 days, Mr Kejriwal
had ordered the state auditor to look into the
accounts of power distribution companies to see
if they were profiteering; he had also threatened
to cancel the licences of Delhi's two electricity
distributors over power supply issues.
"They will cut power tariffs, water tariffs - that is
the expectation," said TS Harihar of HRBV Client
Solutions. Markets could correct more in the
short term, but 8,500 should act as a floor for
the Nifty, he added.
Power stocks led the decline, with Tata Power
losing 2.7 per cent on fears that AAP may again
lower power tariffs in Delhi like it did in its earlier
stint. Reliance Infrastructure fell 8.7 per cent.
Weak corporate earnings also weighed on
sentiments. "It is a large reaction to
disappointing results... There is no demand in the
economy, which is my major cause of worry,"
said Nischal Maheshwari, head of research at
Edelweiss Financial Services.
The biggest Nifty losers were L&T, down 6.6 per
cent, Tata Steel, down 5.75 per cent and Gail
India, down 4.62 per cent. All three reported a
sharp fall in profit during the December quarter.
However, IT stocks such as HCL Tech, Infosys
and Wipro gained tracking the weakness in the
rupee, which slipped below 62 per dollar.
The Sensex ended 490 points lower at 28,227
while Nifty closed at 8,526, down 135 points.
(With inputs from Reuters)
