Marvelous Monday
The Big Day! Markets hit 2 upper circuits today. Trade was halted for the rest of the day on BSE and NSE. The first upper circuit of 15% was hit in just 30 seconds and the second upper circuit of 5% at in just 10 seconds. Sensex closed at 14284, up 2110 points and Nifty at 4323, up 651 points from the previous close. A cheering fact for traders and investors.
What might have been the factors that rejoiced markets to such a level.
Bloomberg states that, "The ruling Congress party won the most seats since 1991, when then-finance minister Singh abandoned Soviet-style state planning and introduced free-market reforms that have helped India’s economy quadruple in size. With almost twice as many seats as the main opposition, Singh, 76, may further reduce barriers to foreign investment in insurers and retailers, plans that had been frustrated by communist lawmakers." The last sentence here is an important factor - "...plans that had been frustrated by communist lawmakers."
One of my favorite on the Dalal Street, Rakesh Jhunjhunwala of Rare Enterprise has marked that, importance of regional parties is now diminishing. He also states that, "The budget will be the real statement of the economic intent of the government". Really an important factor to look forward to. Further, he says, "I don’t think there is much scope for giving tax relief looking at the fiscal situation". This also needs to be watched.
What might have been the factors that rejoiced markets to such a level.
- Left parties will be out of the government. UPA can now go ahead with the economic reforms in sectors like Insurance, Automobiles etc. without any hindrance.
- More than 200 seats for Congress party in last 18 years promises a stable government.
- Several leaders, who were part of race for the PM post, have now vanished from the scene. And an able economist will be again seen serving the top job.
Bloomberg states that, "The ruling Congress party won the most seats since 1991, when then-finance minister Singh abandoned Soviet-style state planning and introduced free-market reforms that have helped India’s economy quadruple in size. With almost twice as many seats as the main opposition, Singh, 76, may further reduce barriers to foreign investment in insurers and retailers, plans that had been frustrated by communist lawmakers." The last sentence here is an important factor - "...plans that had been frustrated by communist lawmakers."
One of my favorite on the Dalal Street, Rakesh Jhunjhunwala of Rare Enterprise has marked that, importance of regional parties is now diminishing. He also states that, "The budget will be the real statement of the economic intent of the government". Really an important factor to look forward to. Further, he says, "I don’t think there is much scope for giving tax relief looking at the fiscal situation". This also needs to be watched.
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