The nation has given its verdict: the Congress-led United Progressive Alliance (UPA) comes back to power without the baggage of the Left — just what the doctor ordered for the markets.
In an exclusive discussion on CNBC-TV18, leading investor and trader Rakesh Jhunjhunwala of Rare Enterprises said that the election results signalled the coming to end of divisive politics. “The victory is very important for what will happen ahead given the economic circumstances prevailing in the world,” he said, adding that he sees the country going back to 8–10% growth on the back of a stable government. “I expect a lot of capital inflow into to India,” the ace investor said, adding that the government was likely to be aggressive with reforms. “The market would prefer to see a pro-reforms finance minister.”
Samir Arora of Helios Cap said that he saw a big rally ahead in the markets. “On Monday, we could open one circuit — a thousand points on the Sensex — up,” he predicted. Arora added that Monday’s possible rally would be followed up with a long durable rally. For the post of finance minister, Arora said Montek Singh Ahluwalia, the current Deputy Chairman of the Planning Commission, would be an ideal candidate.
Manish Chokhani of Enam Securities said that the verdict had come at a good time with the continuation of the rally that had already happened recently. “It may now happen that people were earlier working with the 8,000-12,000 band. Then it came up to 10,000-14,000. Now the band could range between 12,000 and 16,000,” he said. Chokhani added that he expected insurance reforms ahead and that there may be huge inflows in the banking space. “If liquidity returns, engineering, capital goods and realty stocks will benefit significantly,” he said.