Straight from the Specialists
(Any opinions expressed here are those of the author and not of Reuters)
Markets ended budget week below support levels of 5800/5840 and just when the six-month rally seemed over for good, it made a spirited V-shaped recovery to close at 5946 on Friday, with gains of 3.95 percent. The Street is divided with some expecting this to be the beginning of a new rally with the market scaling highs that it missed in February; others see it as a strong pullback which will fizzle out soon.
The government seems to be responding faster to allay investor fears. It was quick to respond to FII worries over proposed changes in tax residency certificates. Finance Minister P. Chidambaram has been assuring investors of continued policy measures, including the Direct Taxes Code (DTC) bill being introduced in the current parliament session.
The mood also seems to be changing among rating agencies. Moody’s suggested that the worst may be over for India and revised their growth guidance to 6.2 percent for 2014.
The debate on the Street will slowly shift to the elections with speculation over prime ministerial candidates in the 2014 polls. Policy announcements over the next few months would be eagerly awaited but one wonders whether they would continue after the elections.
(Rajan Ghotgalkar is Managing Director of Principal Pnb Asset Management Company. The views expressed in this column are his own and do not represent those of either Principal Pnb or Reuters)
The Sensex tested the 16,000 mark last week after 15 months.
I believe the following three quotes which made headlines on different days, tell us a lot when we put them together.