Mkt to remain buoyant on poll results

Written by Markets Bureau | Mumbai | Updated: May 19 2009, 04:37am hrs
Finally, with results of general elections arriving in favour of Congress led UPA, Indian equity markets are likely to remain buoyant in the coming week. Market participants believe that after the tremendous victory of the Congress party, they should now fast bring the ailing Indian economy back on track and start initiating policy programs.

In the past couple of trading sessions, domestic markets witnessed huge volatility over a poor showing by either national alliance, fearing the emergence of a weak coalition. Despite volatility, foreign institutional investors (FII) were constantly net buyers which gave some sigh of relief to the Indian equity bourses.

On Friday, the 30-share Sensex of Bombay Stock Exchange (BSE) added 300.51 points or 2.53% to close the day at 12,173.42 points. The broader S&P CNX Nifty of National Stock Exchange (NSE) ended the day at 3,671.65 points gaining 78.20 points or 2.18%.

During last week, BSE managed to gain over 2.55%, while Nifty was up by 1.41%. But with a national party emerging as a winner in elections, it could boost investor confidence.

A Balasubramanian, chief investment officer of Birla Sun Life Mutual fund said, Congress-led UPA government after successfully completing its term and again emerging as winner indicates positive signs. Now as the government is stable, they can start initiating the policy programmes soon. After this victory, UPA can again also start working on bringing the Indian economy back on track.

On UPAs victory, dealers in the market say for the next few trading sessions, international cues will take a back-seat and domestic cues will lead the market.

Madhabi Puri Buch, MD & CEO, ICICI Securities said, In the long term, the new government has a unique opportunity to add to its strategic policy initiatives. The country today has a fiscal policy and a monetary policy. There is today, a unique opportunity to create a "markets policy" that will direct what the country wants to see as the balance sheet of India Inc. The mix of debt and equity, the mix of long-term and short-term funds, the mix of domestic and foreign funds.