Today, after taking a pause on Tuesday, bulls would look to resume their quest towards the 15k levels. Conviction seems to return that the process of economic turnaround has already begun which is visible in the Auto and the cement monthly numbers. With the six core industries clocking fastest growth rate in 10 months, the bulls will be emboldened to kiss the 15K mark, levels last visited in Sept ‘08. Positive trend in Asian markets will help the cause. While stocks may remain firm in the near term, one must stay guarded given the euphoric rally.
The summer has been phenomenal for the bulls, with growing signs that the worst of the global financial-cum-economic turmoil is behind us. The icing on the cake for India came with the UPA’s resounding win in the Lok Sabha polls. Macro-economic reports too have been heartening, though sliding exports remain cause for concern. Also, the recent improvements have been limited to select pockets. Much needs to be done in several other fronts.
So, it will be quite a task for the UPA to lift the GDP growth back to 9% from around 7% now. The public finances are in a mess, though the slowdown leaves less scope for fiscal prudence at least this year. Globally too, there could be fresh troubles.
