Elections to five states are due in November-December2013 and general elections in April-May2014. The political atmosphere has got super charged over the weekend and is likely to be at centre stage in the markets this week. Wednesday is a trading holiday on account of Mahatma Gandhi’s birth anniversary. This break could act as a change in trend or increase the momentum in the markets.
The markets have in the space of four weeks seen gloom, doom and boom. We lost sharply and the Sensex went to levels of just below 17,500 and in about three weeks recovered dramatically to cross 20,700. The Indian rupee fell to almost Rs 69 and recovered to just around the Rs 61 level and closed at Rs 62.50 last Friday. FII’s went ballistic and bought stock worth over Rs 4,500 crs in just two days, but that seems to have cooled off. What next?
This week as mentioned above it is politics, politics and politics. The government sent an ordinance to protect convicted MP’s and MLA’s to the President for his approval which had created a stir amongst all whether it be political, bureaucratic or intelligentsia. The PM is away to the US to attend the annual UN summit and in a surprise and dramatic manner the Congress Vice-President made an unscheduled visit to a press briefing and criticised the ordinance as being rubbish. This was not an outburst from an immature person but melodrama at its best. It has certainly put the PM and his government under undue pressure but the Namo factor is telling on everything that the congress party does. The PM has been virtually insulted but knowing things how they are in the country he would have to swallow his pride. The ordinance was being brought to save close ally RJD chief Lalu Prasad Yadav whose fodder case scam judgement is to be pronounced today.
With the ordinance and Laluji out of the way it leaves the Congress space to manoeuvreNitish and the JDU for a possible alliance in Bihar and maybe national. Whether this will happen or not one is not sure but the Congress seems to be desperate to win come what may. They have tried to please every segment of society with various bills, ordinances except the investor class. The comments from the FM on NSEL were shocking and most unexpected. There is every possible violation under the sun which has happened and the blame is out on the investors as they were supposed to be aware of the wrong doings from day one.
Back to our PM and Rahul, they will continue to blow hot and cold as the party is unable to project Rahul as their PM candidate. Our hapless PM will have to continue to bear the brunt, insults and you name as it as long as he is alive or the congress is in power. It is most unfortunate that this is happening to a man who under the then PM Narasimha Rao as FM was hailed as the visionary and the man who introduced reforms.
Our markets will be full of rumours and “HOS” (heard on the street) as far as what the PM should do and will do. But in the end nothing will happen and probably this job of the PM has a rider that insults are a part of the job and self-esteem is to be kept at home and not brought to work.
Politics will be the only entertainment in a market which is slowly but steadily getting back to its own ways. The next scene of action will be in the following week when Infosys declares results on Friday the 11th of October. Till then enjoy the rhetoric in Delhi and Patna.