It looks like the worse is over for Indian economy. One can see the days of surging economy in near future. Economics and elections are taking the markets to a new level. Experts are commenting that it might not be a short term boom and may last for long post elections. There are five good signs that is bringing optimism in Indian markets:
Sensex breaching new highs:
A few minutes back, Sensex touched a lifetime high of 22,000 before settling at 21,919.79 on Friday with a rise of 405.92 points or 1.89 per cent. Nifty also achieved a new closing high of 6,526.65 the same day. 149 stocks touched their 52-week high on the BSE. It’s like a Euphoria at Dalal Street. Market is going berserk. Stocks are reaching their all-time high levels. A sustained mark of 24,000 can be a reality soon.
After dipping to 69.225 vs Dollar, Rupee can be seen surging again where it reached its 3 month high level of 61.07. With higher net imports in our country, surge in the value of Rupee is a good sign for the industry. Though it led to 5% decline in IT shares, yet, overall industry went booming.
Return of FIIs:
Foreign institutional investors (FIIs) have pumped money back into the Indian markets. Last 15 sessions alone witnessed investments worth $1 billion in India. Sentiments towards Indian markets is improving. There is a much greater faith in the way the Indian economy is being run now as compared to many other emerging markets.
Though our GDP growth rate is estimated at a lacklustre 4.7%, still a growth turnaround seems to be a good possibility now. Curb on gold imports and higher interest rates which has kept inflation in check have finally paid out. Pro-active measures by RBI led to a CAD of 2.3% of GDP for April-December period.
Chances of a Stable Government:
Though people’s sentiment say that the chances are bleak, opinion polls indicate that NDA is likely to get more than 200 seats in the Lok Sabha elections with UPA coming out as a distant dreamer getting only 140 seats. Analysts are predicting that a NDA-led government would turn out to be a heaven for the markets and the results are already visible at the stock market. It is possible that
India will no longer be a country of ‘Policy Paralysis’ if any party gets a clear majority.