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As AAP Flops and BJP Rocks, Markets Gallop

As AAP Flops and BJP Rocks, Markets Gallop

Chart Courtesy: http://BseIndia.com

Chart Courtesy: http://BseIndia.com

Markets on “Modi-run”. Sustained all time high for a couple of trading sessions. 

The nation is witnessing Lok Sabha elections which is more exciting than many of the previous ones. This is probably the first time in few decades that the youths across all walks of life are not just participating in scale but are excited as well.

Markets have been witnessing the political scenario with an hawk’s eye. When the result of Last elections came, the stock markets cherished which upper circuits on the indices themselves, something which is rather very uncommon. The markets were happy as it was expected that UPA has won with a good numbers.

The bull super run on markets was more about a stable government rather than anything else. But the past few months have witnessed a sheer disappointment with the UPA among the business circles. With the series of scams of colossal amount coming out every other day, anti corruption activities led by Anna Hazare and Black Money movement by Baba Ramdev have given tough time even for the most competent stalwarts of Congress.

Modi is considered to be business friendly and that was seen when he spoke in CII and many other places. The markets have been anticipating a “Modi wave” in the elections for a long time. And hence despite very uncomfortable situations across the globe, Sensex and Nifty showed strength. The policies that NaMo has been using for Gujarat (read Gujarat Model) have impressed many critics and bagged awards.

But the twist in the tale come after a blockbuster win of AAP in Delhi. The toddler party made a much hype in their debutant win in the Delhi elections. The offbeat kind of marketing regarding their work done by AAP created ripples in the political circles. People seemed to be impressed with their work. This meant that like Delhi assembly, there could be a chance of a hung assembly in center. In such a case, the markets looked disappointed and negative.

There were news of a third front coming into picture. This would have meant a chaos both in stock markets and the politics. And Arvind Kejriwal’s statement that he will neither take or give support to any party, gave a room for a 4th front considering his party’s thrilling debut. However, a series of activities that were done by Aam Aadmi Party while in Government raised eyebrows. Add to that resignation by Arvind Kejriwal had taken away some of the credibility from him (at least the recent polls and social media shows this). This makes NaMo numero uno choice in many of the pre-poll surveys.

The Result:- Stock markets rocketing due to Modi effect and failure of AAP. Last week we saw all time high and it was sustained for days.  Sensex moved from 20k to 22k this month. Markets have been in green for the past 10 days barring today(This was because of the banking license issue and profit booking).

Gear up for a wow-markets in the coming days 🙂

Some more info:-
Now even JPMorgan look positive for the markets. (Read the story).

After Goldman and CLSA, Nomura too sees Modi wave



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