Indian shares edge higher; all eyes on election results

Credit: REUTERS/SHAILESH ANDRADE

Indian shares opened higher on Wednesday led by financials, a day ahead of counting of votes in the general election, in which Prime Minister Narendra Modi is expected to retain power.

By Arnab Paul

May 22 (Reuters) - Indian shares opened higher on Wednesday led by financials, a day ahead of counting of votes in the general election, in which Prime Minister Narendra Modi is expected to retain power.

Modi is set for a clear win, according to the exit polls that came out on Sunday after the seven-phase contest ended, but such polls in India have proved misleading before.

Markets have been on a bull run with both the NSE index .NSEI and the BSE index .BSESN gaining 6% in three sessions to Monday. Profit booking on Tuesday saw the markets close 1% lower.

However, analysts predict that the markets will quickly discount the election results.

"Going forward in the medium term...we expect the markets to consolidate post the election outcome as focus would shift back to fundamentals and global cues which have been volatile due to re-escalation of U.S.-China trade tensions," said Jayant Manglik, president - retail distribution at Religare Broking.

The broader NSE index .NSEIwas up 0.04% at 11,714.15 as of 0406 GMT, while the benchmark BSE index .BSESNwas 0.14 % higher at 39,025.91.

"Technically, while the Nifty has corrected, the underlying trend remains up. Further upsides are likely once the immediate resistances of 11,857-11,884 are taken out. Crucial supports to watch for any weakness are at 11,682-11,657," Deepak Jasani, Head of Retail Research at HDFC securities.

Asian stocks remained jittery despite Washington's temporary relaxation of curbs against China's Huawei Technologies. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was 0.05% higher.

ICICI Bank Ltd ICBK.NS gained 1.4% while index heavyweight Housing Development Finance Corp Ltd HDFC.NS rose 1%.

Tech Mahindra Ltd TEML.NS fell as much as 3.7% after March-quarter profit dropped 7.4% and missed estimates.

(Reporting By Arnab Paul in Bengaluru; Editing by Rashmi Aich)

((arnab.paul@thomsonreuters.com; +91 8067493881; Reuters Messaging: arnab.paul.thomsonreuters.com@reuters.net))

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