The budget was presented a week ago and whether it was good bad or ugly is borne out of the fact that FII’s who the mainstay of our markets are have turned bullish. They have been sellers for quite some time and bought on the remaining four days of the week after the presentation of the budget. The BSESENSEX rallied 1,492 points or 6.44% to close at 24,646.48 points. From the low on budget day the rally is even stronger as the BSESENSEX gained 2,000 points. The NIFTY gained 455.60 points or 6.48% to close at 7,485.35 points. The rally has been strong, widespread and almost everything gained. So far so good.

World markets rose led by the Dow Jones which gained 366.80 points or 2.2% to close at 17,006.77 points. By and large the markets have appreciated the budget on three broad factors. Firstly the fiscal maths or discipline is in place. Secondly there is a push for infrastructure spending to spur growth with a complete rural focus and thirdly the government wants compliance and transparency. Keeping this is as the central theme, it is believed that with two consecutive failed monsoons things should be better. The monsoon is expected to be much better this time around. If that does happen the multiplier effect of demand and consumption will drive growth.

The reason why FII’s have turned bullish on India is the realisation that hardly any countries are projecting a growth of 7% or thereabouts. India is projecting that and its expectations are borne out and sort of validated by World Bank. Crude prices seem to have bottomed out and have moved upwards. This is welcome news for global markets.

Having rallied so much in just four days we need to consolidate and a correction will be more than welcome. The next event as far as India is concerned is a rate cut in April when RBI meets. Markets will be choppy and should hopefully have an upward bias from here on.