Most market analysts are pleasantly surprised by the clear verdict in favour of the UPA. It is a very good signal for the Indian economy in the long run. This result, that has come at a time when most poll analysts were predicting a hung parliament, is significant in more than one way:
- It's a victory of 'Jai Ho' over 'Bhay Ho'. The electorate have voted in favour of a positive election campaign, that focused on the issue of development.
- All those who fought on the development issue have received thumping victories irrespective of the Party line: Congress in Delhi, Rajasthan, AP, Maharashtra; BJP in Madhya Pradesh, Chattisgarh, Karnataka; JDU in Bihar; BJD in Orissa.
- Those playing divisive politics have been rejected by the electorate: Left front, BSP, SP, ADMK, RJD have lost massive vote share.
- The result is a victory of the clean image of PM, Dr. Manmohan Singh. Now he can focus on the development issues without the burden of allies like the Left front and Lalu.
- The decisive mandate may prove to be a watershed in the Indian politics. It has shown that good economics always pays.
The poll verdict may have laid the foundation of a strong long term bull run on Indian Markets. Although the economy may take a few quarters for revival, a stable Govt. augers well for the country. The markets will definitely greet the UPA victory with substantial gains in the near future. The going is likely to be positive till the Budget, after which it may retreat on global cues. It may be prudent to take partial gains in the sudden burst of euphoria. Long term investors can buy on declines, to ride the next bull run.
1 comment:
Righty said: it was Jai ho on Dalal Street today. But have the fundamentals of the economy changed overnight? I have serious doubts about it. This rally may trap many small investors.
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