The markets rose on every single day last week. There were four trading days and the SENSEX was up 419.37 points or 2.03% at 21,120.12 points. The NIFTY rose 121.50 points or 1.97% to close at 6,276.95 points. Elections for the 16thLok Sabha would be notified sometime this week and the election schedule for the same would also be announced. It is expected that there would be 6 to 7 phases for the elections. There is a last ditch effort being made by the government to promulgate some ordinances to show the nation and the electorate that the outgoing government is serious about curbing corruption and is coaxing the President to give his assent for such promulgation of ordinances. Only time will tell how many are finally proposed and how many promulgated?
Election alliances are the hottest item on the menu these days and there is hard bargaining currently on. Time is running out and pre-poll alliances need to be finalised in the next few days. The split of Andhra Pradesh may not bear the desired results for the Congress if TRS does not merge with the Congress. The position in Seemandhra for Congress is quite precarious with the outgoing Chief Minister quitting the Congress and all ready to form his own political party. A rejuvenated TDP and erstwhile CM YSR’s estranged son are all part of the electoral battle.
Once must remember that in the outgoing 15th Loksabha the Congress had its highest contingent of MP’s from Andhra Pradesh. The party boasted of 33 MP’s. With the split and Seemandhra getting 25 seats and Telengana 17, the arithmetic becomes that much more difficult. Yet another state where the alliance war is heating up is Bihar where a three cornered contest is imminent. It would be between the Congress, BJP and the third would be either the RJD or the JD-U. Final outcome could be known as early as tomorrow or in a couple of days. The final outcome would be interesting.
One thing is certain that the BJP has got its sights and eyes trained on 272 which is the halfway mark. The congress on the other hand is engaged in trying to salvage the situation and restrict the rout. The markets would track the developments more closely than economic data over the next six weeks.
Economic data during the week was disappointing with GDP in the third quarter October-December 2013 being 4.7% against 4.3% in the previous year. This was however lower than the 4.8% in the July-September 2013 quarter. The estimates for the year 2013-14 t 4.9% look optimistic and one should not be surprised if they are lower than this number.
February series expired on a quiet note and the open interest at the beginning of the March series is quite low reflecting the poor interest in the markets. The markets are rising on the back of FII inflow and the scepticism that exists with regard to a clear mandate in the elections. The markets are less than 2%away from a new high which was made in December 2013. It’s a matter of time before the same is broken. Opinion polls and overseas cues will influence the market while FII inflows will be the mainstay of the markets.
Enjoy the fun at the marketplace.