Economics Vs Politics - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Economics Vs Politics

Apr 13, 2002

Bourses ended trading not much changed from the previous week, which has been the trend over the past three weeks. Having factored in a recovery in February, supported by a rise in the U.S bourses, markets are looking for more economic news to support future direction. However, slide in the U.S markets coupled with domestic and international concerns has capped sentiment. The U.S economy has rebounded from the slump with GDP numbers for the past two quarters registering positive growth. Many analysts have revised their GDP growth forecasts for 2002 to 5% and academics debate whether U.S ever had a recession. While the economy charts out a recovery, stock performance may not reflect a similar bounce back, as current valuations seem adjusted for the earnings turnaround. Increased liquidity, with lower interest rates, has found its way into the market, keeping stock prices buoyant, as risk taking appetite increases.

Consequently, Indian bourses may have to perform independently of the U.S markets. Concerns of higher energy prices have reduced with Israel scaling down its offensive against Palestine. Also, reports of comfortable crude inventory levels with the U.S, cooled speculation in oil markets. This should help lift domestic sentiment.

As per reports, the Gujarat assembly could be dissolved and fresh elections are to be held. The latest moves smell of political machinations. Will a fresh mandate, wash the hands clean of the present state Government of administrative failure -- putting it mildly -- in the recent Gujarat carnage? The majority community supports the BJP. Will they dislodge the hand that rocks the cradle? Will a landslide victory result in BJP playing the 'Hindutva' card nationally? Or worse, create an environment to play the card nationally? The BJP party seems to have taken full leverage of the fact that its coalition partners and opposition are not confident to go in for fresh general elections. As per reports, since separation of economics and politics seems difficult, the BJP think tank is now contemplating at least slowing down economic reforms when there are more important issues to be separated from politics. Every time hope builds that a Government seems to be guiding the country on the right path, they successfully manage to disappoint.

Barring any developments in Gujarat and its ramifications on the country, many of the concerns that led to weakness over the past month seem to have ebbed. In the coming week, markets move deeper into the earnings season. This is likely to trigger greater interest in the markets. That said, while a rally could lift all boats, many of the index scrip seem valued. Consequently, stock picking is likely to be more broad-based, as has been the case in the past three months. The broader indices have outperformed the BSE Sensex. The rise in the BSE 200, 100 and Sensex has been 21%, 13%, 8% respectively year-to-date.

Equitymaster requests your view! Post a comment on "Economics Vs Politics ". Click here!


More Views on News

The Top 6 Artificial Intelligence Plays in India (Views On News)

Dec 6, 2021

Investors looking to tap into AI theme need to keep an eye on tech firm leveraging the power of AI are making things possible.

6 Penny Stocks that Rallied 1,000%+ in One Year (Views On News)

Dec 6, 2021

These penny stocks shed their penny status by surging 1,000% or more in the last one year.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

All You Need to Know about the Newly Launched Bharat Bond ETF 2032 (Outside View)

Dec 7, 2021

Bharat Bond ETF - 2032 is a new fund offer that will follow a buy-and-hold investment strategy tracking the constituents of Nifty Bharat Bond - April 2032 index.

Stocks You Should Buy, Even if the Market Falls (Profit Hunter)

Dec 7, 2021

Here is how to approach smallcap investing as markets get nervous.

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

India's Top 5 Monopoly Stocks to Watch Out for (Views On News)

Nov 30, 2021

These 5 companies dominate their sectors with a huge piece of the pie.

The Biggest Winners and Losers in India's Transition to Electric Vehicles (Profit Hunter)

Nov 26, 2021

How India's EV transition could be a major headwind for the incumbents.


Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms


Dec 7, 2021 01:38 PM