With voting commencing in five states, including West Bengal, Assam, Tamil Nadu, Kerala, and Puducherry, market participants expect volatility to open the trading week. Nevertheless, market experts advise investors not to get carried away with political news but focus more on the macroeconomic indicators.
According to a report by News18, results from state elections do not determine long-term trends in the Indian stock market. Instead, international events exert greater influence.
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Indian stock indices start the day in negative territory. For instance, the Nifty 50 closed Tuesday's trade lower at 23,997, down 0.73%. Similarly, the BSE Sensex fell marginally by almost 1%. The high cost of crude oil and consistent sales by foreign institutional investors contributed to lower market sentiments.
Global cues likely to outweigh political outcomes
Foreign institutional investors (FIIs) have extended their selling streak for the tenth straight month, offloading around â‚ą70,100 crore in April alone. In 2026 so far, total outflows have touched nearly â‚ą2.4 lakh crore, driven by a weaker rupee, rising US bond yields and crude oil prices holding above $110 per barrel.
Domestic institutional investors have offered some support, investing around â‚ą51,000 crore during the same period, but analysts caution that this may not be enough to offset global pressures.
Nitant Darekar of Bonanza said election results typically act as a “sideshow” for markets, with most outcomes already priced in. He added that traders should avoid chasing sharp moves at the opening bell, as these often reverse within the first hour.
What should traders watch today?
Market experts suggest that the reaction to election results will depend more on deviations from expectations than on the outcomes themselves.
Paresh Bhagat of Mangal Keshav Financial Services said the Nifty is likely to move within a narrow band of 1% to 1.5%, as markets are already factoring in policy continuity.
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Feroze Azeez of Anand Rathi Wealth highlighted that West Bengal could act as a short-term trigger. A stronger-than-expected performance by the BJP in the state could spark a brief rally, particularly given the market’s current oversold conditions.
From a technical standpoint, the 24,000 level remains a key pivot. A move above 24,200–24,300 could trigger short covering and push indices higher, while a drop below 23,900 may invite fresh selling pressure.
