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India Markets Weekahead: Wait for post-budget opportunities

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(Any opinions expressed here are those of the author and not of Thomson Reuters)

Markets were fairly volatile last week, reacting to tough measures taken by the Narendra Modi government to get India’s economy back on track amid worries over monsoon rains and the situation in Iraq.
cfcd208495d565ef66e7dff9f98764da.jpgLong-term investors hailed the hike in railway freight and passenger fares as a step in the right direction to bring down indirect subsidies. However, the government rolled back the hikes on suburban fares to a large extent due to political considerations.

Monsoon rains have started on a weak note but if the rains pick up in July and the El Nino effect is tempered, it would have a direct impact on inflation and interest rates.

In Iraq, latest reports suggest government troops have been successful in pushing the insurgents back. The markets in India have got attuned to the new normal, unless there are new developments.

Markets in India, which have run up 25 percent in the last five months, have discounted the promise of better days ahead with smooth implementation of poll promises. Although Prime Minister Modi has warned about “bitter pills”, investors will find it difficult to digest when these pills are administered. Expectations are high and a few more slippages in implementation could raise questions. The budget would be an important event to convert promises into intent, and it needs to be seen how the finance minister would walk a tightrope.

Markets Weekahead: A decisive mandate for equities

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(Any opinions expressed here are those of the author and not of Thomson Reuters)

Not even exit polls could have predicted the landslide election victory that ‎has put the BJP’s Narendra Modi in the driver’s seat for India.

The Nifty, after the initial euphoria of a 6 percent upswing, ended Friday at 7203, merely 80 points higher than the previous day. It was a typical “sell on news” phenomenon.

Overseas cues to drive the market but limited upside

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A positive week for the markets saw volatility in a narrow band with Nifty gaining about 115 points to close at 5216, a gain of about 2.25 pct. The midcaps and small caps outperformed the frontline stocks indicating retail interest.

FIIs continued with their buying spree lapping up about US$ 535 million worth of stocks. The new finance minister  Palaniappan Chidambaram was given a thumbs up but expectations of any radical move are low especially after the disappointment from Prime Minister Manmohan Singh in the last fortnight.

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