For the first time in history, trading has been halted in the stock market even before the first trade could open as the markets hit upper circuit, in reaction to the comfortable victory of the UPA and the stability that it will bring to governance, the markets and policy decisions.
The stock markets hit first upper circuit with Sensex at 13,479, up 306 points, and Nifty at 4203, up 532 points.
With the air of political uncertainty clearing up with the triumph of the United Progressive Alliance, the bulls have returned to the bourses with a bang.
The mood in the market is euphoric and most analysts and market observers believe that the Sensex might rise to 14,000 by the time the new government presents the Union Budget.
There is an unprecedented sense of jubilation among investors, as they expect a big thrust on the reforms front.
Market pundits had earlier said that they expect a huge rally for the 30-share Sensitive Index of the Bombay Stock Exchange and the NSE Nifty during the coming week as foreign institutional investors start pumping in fresh funds that have been awaiting clarity on the political front so far.
Market experts said the Left-less victory of the UPA over BJP-led National Democratic Alliance not only signifies the formation of a stable government, but also revive hopes of a slew of pro-market policy changes that would take Indian markets to new highs in the coming days.
"Victory of UPA has given strength to the market players. Investors expect that the forthcoming policies may be pro-market and pro-business. FIIs will show a positive inflow now as there is clarity about the forthcoming government," said Anil Ladha, Head-Capital Markets at ICICI Securities.
Though retail investors might still wait for a recovery of the overall economic condition, FIIs, which control almost 60 per cent of trades in Indian stocks, are expected to inject fresh capital.
Market participants said that a surge in FII inflows would certainly help to tame the bulls over the coming few months.
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