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Indian ADRs in Focus as Key Election Results Loom


Dec. 10 2018, Updated 8:20 a.m. ET

Indian ADRs

The election results for five Indian states are scheduled to be released on December 11. Three of these states were among the key contributors to Prime Minister Narendra Modi’s victory in the 2014 general election.

In this article, we’ll see how the election results could affect the Indian economy as well as Indian ADRs (American depositary receipt).

In the banking space, both ICICI Bank (IBN) and its rival HDFC Bank (HDB) are trading flat this year. In the technology sector, Infosys (INFY) has risen 19.4% partially aided by the weak Indian rupee.

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In terms of exit poll results, it isn’t good news for the ruling BJP (Bharatiya Janata Party) and Prime Minister Modi. Exit polls are showing the ruling BJP losing the state of Rajasthan and a close fight in Madhya Pradesh and Chhattisgarh. These so-called Hindi heartland states helped catapult the BJP to a majority government in 2014 after years of coalition governments.

The election results can be viewed as a virtual semifinal before the 2019 general election, during which the BJP will be going up against a resurgent Congress that’s been allying with several small parties. Indian markets rallied sharply in 2014 after the BJP stormed to power. However, over the last few months, the party’s electoral domination has been dented amid a broader coalition of opposition parties. A BJP loss in these elections may not bode well for Indian equity markets (INDA) (EPI).

Meanwhile, the recent fall in crude oil prices could bring some succor to the Indian economy. We’ll discuss this possibility in the next article.


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