Bengal election results to be key trigger for equities next week: Analysts

India’s equity markets staged a sharp rebound in April 2026, delivering their strongest monthly performance since December 2023 after witnessing the steepest decline in six years in March. The recovery came on the back of easing geopolitical tensions following the U.S.-Iran conflict and a cooling in crude oil prices, which had earlier surged 63% and rattled global markets.

Benchmark indices BSE Sensex and Nifty 50 rallied nearly 7% during April, reversing a sharp 11% decline in March that was triggered by risk-off sentiment and heavy foreign institutional investor (FII) outflows.

A mid-month ceasefire in Iran, coupled with supportive corporate earnings and attractive valuations, helped restore investor confidence despite continued foreign selling.

Markets eye Bengal verdict

Looking ahead, market direction in the first week of May is expected to be driven largely by domestic cues, particularly the outcome of key state elections. Results for West Bengal, Tamil Nadu, Assam, Kerala, and the Union Territory of Puducherry are scheduled to be announced on May 4.

According to market analysts, political developments will play a crucial role in shaping near-term sentiment, with the West Bengal contest drawing the most attention amid a closely fought battle between the Bharatiya Janata Party and the ruling All India Trinamool Congress, led by Chief Minister Mamata Banerjee, who has been in office since 2011.

Siddhartha Khemka, Head of Research, Wealth Management at Motilal Oswal Financial Services, said markets are likely to remain range-bound. “Indian markets are expected to stay sideways with a consolidative bias amid persistent FII outflows, a weak rupee, elevated crude oil prices, and a lack of progress in U.S.-Iran negotiations. Investor sentiment will also be influenced by domestic political developments, with election results likely to add to volatility,” he said.

Echoing a cautious stance, Ajit Mishra, SVP – Research at Religare Broking, said weak global cues and macro pressures are keeping investors on the sidelines. “Additionally, elevated bond yields and cautious positioning ahead of key global developments and upcoming state election results have kept investors on the sidelines,” he said.

Technical levels to watch

Mishra added that technical levels remain crucial. “A decisive move below 23,800 on the Nifty could trigger further downside towards 23,500 or lower, while the 24,400–24,800 zone is likely to act as strong resistance. Traders should maintain a cautious stance and focus on risk management,” he said.

Nifty 50 is likely to face immediate resistance in the 24,250–24,300 zone, and a sustained move above this range could extend the pullback towards 24,450 and then 24,600 in the short term, according to Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities.

On the downside, key support is placed at 23,850–23,800, which also coincides with the previous swing low, he said.

From a fundamental perspective, Vinod Nair, Head of Research at Geojit Investments, said exit polls offer limited comfort. “The only positive from a market perspective is the indication that the ruling party may consolidate its position, but this does not provide fundamental support. Investors should focus on companies delivering better-than-expected Q4 results,” he said.

Here’s what exit poll trends suggest

Meanwhile, exit polls analysed by JM Financial point to a potentially significant political shift in West Bengal. The BJP is projected to win around 159 seats in the 294-member assembly, crossing the majority mark, while the TMC is estimated to secure about 127 seats. If the projections hold, it would mark a historic breakthrough for the BJP in the state.

In other regions, incumbents are expected to retain power. The Dravida Munnetra Kazhagam-led alliance is likely to hold Tamil Nadu, the BJP-led alliance may retain Assam, and the National Democratic Alliance is projected to continue in Puducherry. Kerala, however, could see a shift, with the Congress-led United Democratic Front (UDF) expected to unseat the Left Democratic Front (LDF).

According to JM Financial, the results reflect state-specific dynamics rather than a uniform national trend, driven by factors such as welfare delivery, governance, and employment issues. Voter turnout remained strong across states, indicating high political engagement.

Despite the political backdrop, analysts caution that global factors will continue to dominate market direction. For now, the consensus is that while the Bengal verdict could trigger short-term moves, the broader trend will hinge on global macro cues, earnings momentum, and fund flows.

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