Tuesday, February 4, 2014

Indian stocks await stable politics

In the last one year, Indian Stock Market has been like a topsy-turvy land. A land wherein on the one hand a single statement by the US Federal Reserve Chairman Ben Bernanke could jolt the Indian economy like never before then on the other hand the dynamism of the newly appointed RBI Governor, Dr. Raghuram Rajan is standing tall like a wall in the way. It is not only economic instability that has rattled the nation but also political precariousness. As India goes to polls in April-May this year for the 16th Lok Sabha elections, it is very difficult to determine whether there  would be a stable government or not. This political uncertainty is making Indian Stock Market suffer. The general elections are happening at a time when the economic growth is at its all time lows and inflation is at its all time high, therefore it is very important to have a government which is capable of strengthening the confidence of not only the country but also of its investors.download (1)

While the Trade-Pandits are banking on the Bhartiye Janta Party’s prime ministerial candidate Narendra Modi as “the Indian stock market's greatest hope” the current political scenario says that it is too early to decide it considering the performance of an year old Aam Aadmi Party in the Delhi elections. Modi has been presented by the BJP as the pro business future Prime Minister who comes with a proven business model. Both Rahul Gandhi and Arwind Kejriwal have failed to attract and convince investors. This was well reflected by the assembly elections results of Rajasthan, Madhya Pradesh, Delhi and Chhattisgarh on December 9, 2013 when the markets jumped by 1.5 percent because of BJP leading the way. But one can’t ignore the fact that things don’t come easy and expected in India. Political instabilities have led to economic downturns and economic vulnerabilities have resulted in political crisis in the past. Whatever be the voter mood in the 2014 elections, the Indian market needs a stable government for a strong economy.


Post a Comment