The markets did cross the psychological level of 21K but failed to sustain the same. It appears the feeling of breathlessness or uneasiness which is felt on climbing dizzy heights was there. There is no euphoria and fundamentals are at a situation where they could not get worse. Then how come we are back at the same levels seen in 2008 and almost similar to those in 2010? The answer lies in people’s expectation and perception.
FII’s are investing quite heavily in India and in the last week they have invested over Rs 4,600 crs.The month of October has seen inflows of over 2.1 billion dollars and there are four more trading sessions to go. There are two reasons for this inflow. The first is that concerns of tapering of the easing seem to have faded away as there will be no tapering until the debt issue of the US is resolved. The current imbroglio has been extended to end January 2014. The second and more important reason is that they as well as smart money in India believes that a wind of change is blowing through the country. State elections to the four states of Madhya Pradesh, Chhattisgarh, Rajasthan and Delhi are to be held and results declared on 8th December. Currently the BJP and Congress rule in 2 states each. The smart money is betting that this present equation of 2:2 would change in favour of BJP and become 3:1 while the most optimist say that it may become 4:0. What would happen will be known with surety only on the 8th of December? Till then markets will remain expectant and in these high levels making others nervous and confused.
The other issue which has become really murky is the case of NSEL. The matter is now crystal clear that the whole exchange because of its nature where they were doing regulatory arbitrage by not coming under the ambit of either SEBI or FMC, committed a grave and serious crime and has abetted in siphoning off funds. The level of connivance of the officials and the promoters is slowly emerging, but the question remains why is the government so slow in taking action against the so called owner/promoter of the exchange.
One is at pains to understand when the CEOtakes the entire blame on him after making a sworn affidavit. Is the world of business so stupid to imagine that when a business unit is doing so well there would be no questions from the board as to what have u done to earn so well or if u have earned so much is there scope of further scalability? To say that they the board had left the running of the exchange in the hands of professionals and they were unaware of anything is just not palatable. In the case of Satyam there were no laws to hold the auditors responsible at that time. Now under the new company’s bill there are enough provisions to hold the auditors responsible. The only explanation for the inordinate delay in taking action can be because of patronage of the powers that be and at a time when the nation is to have general elections in under six months it does not augur well for an issue which concerns over 13,000 investors and Rs 5,600 crs.
Let’s hope Diwali on the 2nd of November becomes more auspicious and brings wealth to the investors at large.
