Straight from the Specialists
(The views expressed in this column are the author’s own and do not represent those of Reuters)
It was a stupendous week with 4.5 percent gain and the closing at 5879, the highest point for Nifty in 19 months. The week started with positive international cues of a Greek bailout, and was further strengthened with Moody’s confirmation of a stable rating for India.
As I predicted last week, the breakout beyond 5650 was triggered by the government agreeing for a debate and vote on the contentious issue of foreign direct investment (FDI) in retail. The fence sitters didn’t want to miss out on the rally and the short sellers were caught by surprise which led to a big move on Thursday, it being the derivatives expiry day. FIIs continued to pour funds, making India one the most favoured emerging markets in the current calendar year with the tally exceeding US$ 19 billion in foreign inflows.
The trouble shooters in Congress were on an overdrive, cajoling and pacifying the allies as well as the fringe parties. It is widely believed that they agreed to a vote only after being assured of it going in their favour in the lower house of parliament, Lok Sabha. There is still a doubt whether they will be able to push the reform through the upper house, Rajya Sabha, where the UPA allies and other friendly parties fall short of the required number by a whisker.