Nifty has returned 26.9% & Sensex 27.7% till date since Sept 2013 when Mr. Modi’sname was first announced as candidate for PM in 2014 elections. Similarly in last 6 months Nifty has returned 18.9% & Sensex 18.2%. Since markets were expecting stable government post election results they were running ahead on hopes. While no one had built in such clear mandate but this was evident that we may have a decisive mandate this time. Thus much of market’s move happened before the final event. That is the reason why this time we did not witness any circuit breaks on both indices on result day. In fact there was profit booking from the top. From market behavior in the past we can safely draw an inference that markets have probably discounted all the positives & perhaps lot of expected positive action till FY15. Hence what will be critical for markets to move further from current levels will be visibility on growth prospects/ economic revival in FY16. Sustainable growth emanating from pick up in investments, resolving issues of infrastructure & implementation on ground. Quick action on restoring confidence of all stake holders, cutting red tape, expediting restart of stalled projects shall boost sentiment.
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