UBS Survey Says Indian General Elections 2019, Oil Prices to Drive the Stock Market Movement

The UBS survey of investors jotted down five possible drivers for the Nifty in order of importance -- oil prices, local fund flows, 2019 elections, bank non-performing loan (NPL) resolution and rupee exchange rate.

The rupee has been among the worst-performing currencies against the dollar compared with its peers so far this year and breached the 70-mark against the American unit in intra-day trade on August 14 amid global uncertainties and concerns over inflation.

"The impact of INR depreciation is mixed ? while 5 per cent depreciation would push up inflation by 10-15 bps, the impact on growth would be favourable, given the boost to net exports," UBS said.

According to UBS, India's macro stability still gets impacted by oil and currency, but "structurally, India is nowhere near the 2013 fragility scenario," the report said.

Investors were asked to rank five possible drivers for the Nifty in order of importance and to predict market sentiment around the Nifty ranging from very bearish (a score of 1) to very bullish (a score of 5).
Market sentiment around the Nifty seemed to be more 'neutral', with an average score of 3.03 on a scale of 1-5.