If the exit polls are anything to go by then it almost looks like the NDA government has already been installed at the center. Exit polls hinted at a clear majority for the incumbent NDA government and have assigned anywhere between 270 to 340 seats to the ruling NDA combine in the general elections. While the actual results will be known on the 23rd of May, at least the exit polls appear to be pointing to a return of the Modi government. Barring Tamil Nadu, Punjab, and Kerala, NDA is estimated by the exit polls to do very well across India. They are largely expected to sweep the Hindi belt.
With elections come volatility and consequently, SEBI and Stock’s Exchanges have beefed up surveillance ahead of election results. The SEBI and exchanges have spruced up their risk management systems to identify any attempts to manipulate the markets with inordinate activities. The heightened surveillance system will be in place from Monday, the day after the exit polls. The systems are likely to be further ramped up on Thursday when the actual election results will be declared to avoid any systemic risk. Markets have been extremely volatile in 2004 and 2009 on counting day.
After 3 months of infusion, there has been some selling by FPIs in Indian markets. IN fact, FPIs withdrew Rs.6400 crore from Indian markets in the month of May 2019. For the month of May, FPI selling was driven by a mix of geopolitical risk in the Middle East, the ongoing trade war and the uncertainties surrounding the general elections. This comes on the back of FPIs buying aggressively into Indian equities in the months of February, March, and April, infusing close to Rs.75,000 crore in these 3 months. Rs.4800 crore was withdrawn from equity markets and Rs.1600 crore from debt.
IMD reports 22% shortfall in pre-monsoon rainfall for the year 2019. The deficit, as per the IMD, for the months of March to May, stood at 22%. However, the deficiency has reduced from 27% due to showers in the Eastern and North Eastern parts of the country. The IMD also reported that conditions were favorable for the South West Monsoons to touch down on the Andaman & Nicobar Islands in the next 3 days. South had the largest deficiency of 46%. The falling deficit is a good signal but then the South West winds must hit early to make up for the deficit. Otherwise, rainfall could fall short.
Venezuela has accused the US of virtually dictating the oil markets in the world through its selective use of trade controls and sanctions. To the extent, Venezuela oil minister has literally accused the US of holding the world oil markets to ransom. Manuel Quevedo admitted that the Venezuelan economy and the world oil markets were under the siege of the Americans. The US has imposed sanctions on Iran and Venezuela and is trying to slow down the Chinese economy by imposing punitive tariffs. The US and the EU have been calling for a change of regime in Venezuela, something which China and Russia have opposed. The US has tried a combination of methods like persuading OPEC, sanctions on Iran and political interference in Venezuela to keep their control on oil. The trade war is also along these lines.
The Ministry of Company Affairs (MCA) expects to recover a total of Rs.2,80,000 crore through the IBC route. This includes some high profile cases like Bhushan Power, Essar Steel, Amtek Auto, and Alok Industries, that are expected to be completed this year. A total of 6500 cases have been admitted by NCLT of various sizes and most of them are likely to yield something positive. The previous year saw nearly Rs.80,000 crore being recovered as per data provided by CRISIL. That is likely to substantially improve the financial performance of the PSU banks in the current fiscal year.
