Marketmen believe that any major setback for the Congress in the elections, would see the markets reacting sharply. However, if the Congress is able to significantly increase its seats and can align with the Samajwadi Party (SP) to form a government in UP it would be a big positive for the markets.
This would also ensure support of the SP to the Congress at the centre, which would strengthen the government's ability to push through reforms. Also, it would result in lesser dependence on the Trinamool Congress, which has off late opposed several policy decisions of the Congress led UPA government, more recently an effort to increase FDI in multi-brand retail.
Globally, the Greek situation seems temporarily behind us. US economic data continues to be robust signalling a strong economic momentum. The only worry remains crude oil, and escalation of tensions with Iran, which could dent market sentiments.