Today, the market thumbs down need not disappoint you much. We had warned that having too high expectations from the budget was foolhardy. That’s exactly what has happened. Stocks, bonds and the rupee made evident their displeasure.
Markets are rarely in agreement with the political class, especially when short term steroids are not articulated. Reforms for markets may mean something different than what they mean for the Government. The bottomline is this: don’t despair as the huge dollops of stimulus unleashed could actually stand India in good stead (in the longer term).
Authors of the budget defend the lack of announcements saying it is not necessary to include the same in the budget. So, there is still hope that disinvestment, PSU IPOs and other reforms may be announced in the coming quarters.
It remains to be seen whether the markets regain their composure after the Monday mayhem? Some sort of a comeback is a given after such a big selloff. The global picture is not too encouraging. One will also have to contend with corporate earnings. Be stock specific and stick to quality stuff. The FIIs’ stance, whether you like it or not, will play a major role too.
Looking at the heavy selling on Dalal Street post Budget presentation, the Nifty seems to be in an oversold position. Markets might stage a comeback on Tuesday provided firm cues from the global markets. However, one cannot rule out further selling.
