Money on the markets
A maturing market amid the mayhem
from Expert Zone:
(Rajiv Deep Bajaj is the Vice Chairman and Managing Director of Bajaj Capital Ltd. The views expressed in this column are his own and do not represent those of Reuters)
The rally in the Indian stock markets, fuelled by the so-called reform announcements, seems to have fizzled out. Frontline indexes have retraced more than 60 percent of the gains made since Sep. 13, 2012, the day the reform measures were made public.
Stock market sentiment turned bullish after the reforms were announced, which typically followed Europe's unlimited bond-buying plan revealed a week earlier and coincided with the launch of QE3 in the United States.
However, subsequent developments such as the Reserve Bank of India’s (RBI) refusal to cut the repo rate citing persistently high inflation at its October policy review, slowing growth and worsening trade and fiscal deficits, have dented some of that exuberance.
The Sensex plunged 5.8 percent on Monday as the higher-than-expected fiscal deficit announced by the government in the Union budget disappointed investors.
The 30-share sensitive index swung from an intra-day high of 15,097 to an intra-day low of 13,959 and closed 870 points lower at 14,043. The fifty-share Nifty ended 5.84 percent down at 4,165.