Apr 20, 2002|
Parliament holds sway
The markets experienced another depressing week on the bourses, as investors pulled out from equities. It has been only downhill from the pre-budget highs touched in February. The much awaited results season has been relegated to the back seat, as markets focus on the developments in New Delhi.
The second round of the budget session has not opened on pleasant note for the majority party in the National Democratic Alliance (NDA). A little ironical that the 'largest party' in a 'democratic alliance' is refusing to go into vote -- take consensus -- on a particular subject. The fracas over Gujarat incidents has rocked both houses of parliament in the current week leading to a stalemate. With a headstrong stand adopted by the confronting parties all regular activities of the parliament have been stalled.
Among the bills that are pending approval is the Finance bill. It seems, the longer it takes for approval, more the chances of rollbacks from the budget announcement. The Finance Minister must be keen to see the back of Finance Bill 2002. Some other bills pending approval are patents, money laundering, consumer protection and fiscal responsibility and budget management. Delay in moving forward on these and other bills have not gone down well with investors'. Also, the increased political uncertainty has added to the risk perception in the markets.
One should have expected a tough opening week for parliament, as opposition and coalition members were likely to debate the developments in Gujarat. The strong stand against the ruling Government is amongst the few times when it is a constructive development. The Gujarat chief minister has to take, if not anything else, moral responsibility for the carnage in Gujarat. The stalemate in parliament and possibility of vote on the Gujarat issue is likely to put pressure on the ruling party to identify a possible solution. Losing the vote will question the moral right of the existing coalition continuing as the Government. A possible solution could be to appoint a new CM in Gujarat and the opposition take back their call for a vote under section 184.
We had mentioned last week, that barring the Gujarat issue, the market looks poised for moving forward. Trading during the week was entirely dominated by the developments at the centre. Last month we had indicated that should negatives out weigh positives the markets are likely to head towards 3,300 levels. Beyond these levels, support is at 3,150. We reckon markets at lower support levels would be exaggerating the current negatives. The fear of political impasse and its ramifications on stability seem to have been factored. Any indication of the situation reverting to normalcy could bring back all the Sensex points taken away. Also, among the three tech bellwethers' only Satyam is left to declare results. Technology results are likely to be a dampener. However, markets move into a period of old economy result announcements, which could bring back cheer.
More Views on News
Jun 10, 2017
Forty Indian investing gurus, as worthy of imitation as the legendary Peter Lynch, can help you get rich in the stock market.
Aug 19, 2017
Ever heard of Lindy Effect? Find out how you can use it to pick timeless stocks.
Aug 18, 2017
Buying the index now will hardly help make money in stocks even in ten years.
Aug 18, 2017
Donald J Trump, a wrasslin' fan, took a 'Holy Sh*t!' blow on Tuesday.
Aug 17, 2017
PersonalFN simplifies the mutual fund account statement for you.
More Views on News
Aug 7, 2017
The data tells us quite a different story from the one the government is trying to project.
Aug 10, 2017
Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.
Aug 8, 2017
Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...
Aug 12, 2017
The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.
Aug 7, 2017
Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...
Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement. LEGAL DISCLAIMER:
Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here
. The performance data quoted represents past performance and does not guarantee future results.SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: firstname.lastname@example.org. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407