It is ironical that the UPA 2 Govt. at the centre came to power in 2009 to kindle a strong post election rally on Indian stock market, and it is bowing out in 2014 with a record breaking pre-election rally. The difference, however, is that in 2009 markets greeted the formation of a strong UPA Govt., this time around they are celebrating the ouster of a weak UPA Govt.: a stark change in the perception of the market pundits in a span of 5 years.
The markets have closed FY 2013-14 on a high with Nifty scaling 6700 and Sensex comfortably placed above 22000. There is some more steam left in the markets as the election euphoria gains momentum. But there is a word of caution for investors who wish to enter the markets at the current levels. There is a consensus among a wide range of analysts about Nifty scaling 6900-7000 levels by March 2015 (Sensex levels of 23000-23500), on the back of a stable BJP led Govt. at the Centre and a good monsoon to bolster the chances of an economic revival. Outgoing UPA 2 has done its bit by reducing the CAD and stabilising the Indian currency with support from RBI.
Investors may be lucky if they see the levels of Nifty at 6900-7000 in April 2014 itself in the run-up to the General elections. In such a scenario it would be prudent to book substantial profits rather than wait for March 2015. The post election movement of our markets would be dependent on far too many variables: Strong Rupee, Inflation management, Progress of monsoon and also International developments. Rather than hoping for a favourable result on all these parameters it would be a better bargain to book profits as the opportunity arrives due to pre-election euphoria. There are more than 75% chances of a reasonable correction after elections, even if a BJP led Govt. is installed at the centre. The markets have already factored in the best case scenario. Take your bet on one of the most exciting elections of our times.
The markets have closed FY 2013-14 on a high with Nifty scaling 6700 and Sensex comfortably placed above 22000. There is some more steam left in the markets as the election euphoria gains momentum. But there is a word of caution for investors who wish to enter the markets at the current levels. There is a consensus among a wide range of analysts about Nifty scaling 6900-7000 levels by March 2015 (Sensex levels of 23000-23500), on the back of a stable BJP led Govt. at the Centre and a good monsoon to bolster the chances of an economic revival. Outgoing UPA 2 has done its bit by reducing the CAD and stabilising the Indian currency with support from RBI.
Investors may be lucky if they see the levels of Nifty at 6900-7000 in April 2014 itself in the run-up to the General elections. In such a scenario it would be prudent to book substantial profits rather than wait for March 2015. The post election movement of our markets would be dependent on far too many variables: Strong Rupee, Inflation management, Progress of monsoon and also International developments. Rather than hoping for a favourable result on all these parameters it would be a better bargain to book profits as the opportunity arrives due to pre-election euphoria. There are more than 75% chances of a reasonable correction after elections, even if a BJP led Govt. is installed at the centre. The markets have already factored in the best case scenario. Take your bet on one of the most exciting elections of our times.
