Assembly election results 2018: India Inc expects uncertainty over poll outcome

The Assembly election results have come in favour of the Congress in Chhattisgarh, Madhya Pradesh and Rajasthan. This proves a clear shift in the mandate away from the Bharatiya Janata Party (BJP). However, corporate India anticipates a rise in volatility due to the election outcome.

The Hindi heartland of Madhya Pradesh was considered to be a BJP stronghold. However, with shifting loyalties among voters, the one-party mandate was not achieved.

A senior executive from the steel industry said that instability has come sooner than expected. "Stability is important for doing business. But we have now shifted from one party getting a massive mandate, to a situation where there are setbacks for it. The steel industry has gone through a wave of consolidation due to the Insolvency and Bankruptcy Code that was introduced by the NDA government," the executive added.

Counting of votes has completed in Mizoram, where the Mizo National Front (MNF) has emerged victorious with 26 seats. In Chhattisgarh, the Congress has a major lead with and Chief Minister Raman Singh has resigned taking complete onus of the defeat. The grand old party is leading in Rajasthan, and there is a neck-and-neck fight in between the Congress and BJP in Madhya Pradesh. Telangana has gone to Telangana Rashtra Samithi (TRS).

Shankar Sharma of First Global tweeted that the Assembly results have been intriguing. "I expected a massive down day. What's the market telling us?," he added.

However, there could be some uncertainty in the markets in the near term due to the election outcome.

VK Sharma, Head PCG and Capital Markets Strategy, HDFC Securities said that the state election indicates a clean sweep by Congress in important states like Madhya Pradesh, Rajasthan and Chhattisgarh. This could also mar sentiments in the Indian currency markets due to rising uncertainty over the 2019 Lok Sabha elections.

Manipal Global Education chairman, TV Mohandas Pai, congratulated the Congress and party president Rahul Gandhi for their "great performance". He said that the people has spoken and he was now hoping for corruption free good governance that will improve the life of all citizens.

In a note, Nomura said that the state election results were not in favour of the rupee, with the BJP suffering significant losses across states. However, it said that today's limited market reaction, even as Madhya Pradesh results oscillated, suggested that the market expectations were already low heading into the election.