Money on the markets
A maturing market amid the mayhem
The latest inflation data for early March may please authorities ahead of national elections. Political leaders will trumpet the fact that the government’s efforts have yielded results and the demon of inflation has finally been tamed.
But the early March number throws up some serious concerns. It signifies that the Indian economy has entered a phase of deflation for a temporary period. Demand in the economy is extremely subdued and fresh efforts are needed to restore confidence.
Farm crop output is likely to be robust and this may help in moderating prices but the problems with regards to supply bottlenecks have hardly been addressed. Ports, roads and reforms in agriculture must therefore be the focus of the new government which assumes power after the April-May elections. Past experience has shown that a tardy monsoon can upset calculations overnight.
There is very little time to lose and massive reforms across all sectors are needed to get the economy moving again. Much will depend on the government which is voted in after the elections.
The benchmark gained 1.2 percent in early trade, but lost ground on profit taking and closed at 9,001.
The Sensex closed 4.9 percent higher on Friday to post its biggest rise in three months, as investor confidence was bolstered by a jump in other Asian markets following positive news from the United States.
The benchmark closed 412.86 points up at 8756.61, supported by index heavyweights Reliance Industries (up 6.6percent), ICICI Bank (up 8.6 percent) and Infosys (up 5.6 percent).
Well things looked shaky in the morning with the Sensex in negative territory, but it managed to recover in late trade to close 52 points up at 8954.86.
The BSE Sensex fell for the second consecutive day and ended 1.59 percent down on Thursday as an unexpected fall in industrial output data for December added to concerns over a deteriorating global economic outlook.
The BSE Sensex fell in early trade but pared losses to close 0.3 percent down on Wednesday as the much-awaited U.S. stimulus package failed to shore up investor sentiment globally.
Investors were disappointed with the $838 billion stimulus bill passed by the U.S. Senate on Tuesday and their reaction clearly showed greater concern about financial security.