X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Cannot runaway from politics - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Nov 16, 2002

    Cannot runaway from politics

    The week saw the BSE Sensex breaching 3,000 levels to close at a month's high. Technology counters largely guided benchmark indices. With the outsourcing story materialising at the ground level, tech is fighting back. Wipro has witnessed considerable positive news flow over the past fortnight leading to Nifty outshining the Sensex.

    Having said that, ever since the cabinet committee on disinvestment (CCD) meeting on September 7, 2002, politics has taken over from economics. Stalling of the privatisation programme has been followed by deferral of the FDI policy and delay in implementation of second-generation reform legislation. In fact, as per reports, N.K. Singh, chairman of the committee on FDI, has stated that a key risk facing the country is backlog of new legislation. Making matters difficult has been lack of consensus within the majority party and with partners of the coalition government. We continue to believe the stalemate is due to deferring ideologies between the old boys group -- more their concern over vested interest -- and new political entrants espousing modern thinking.

    Having said that, ironically, lack of ideological leanings among political parties seems to be offering a ray of hope. With the winter session of parliament to commence next week, the incumbents are worried opposition will question the Government's stand on privatisation and other less popular reform measures. Consequently, reports suggest, the coalition is attempting to thrash out a compromise solution. The party that introduced reforms and privatisation is supporting sale of only bleeding public sector units (PSUs). Playing devil's advocate, to support privatisation will the party first bleed all the PSUs? As politics has led to investor diffidence, it seems that politics might only be able to rebuild market confidence. Will Santa bring in the goodies this winter?

    Global markets continue to be jumpy on the possibility of U.S military action against Iraq. As mentioned last week, we reckon, war is the last choice even for U.S. However, all the war talk could be strategies for expediting a consensus among veto-bearing U.N members on U.S framed weapons inspection resolution. Also, the noise could be intimidating strategies for bringing a more compromising Iraq on the negotiating table. At the same time, offering flexibility to adopt the last recourse.

    Post mid-term elections, the bull run on U.S markets is taking a breather. The rally could have been to pump in a feel good factor and project a recovering economy, which was the biggest threat to the Republicans. The attention on foreign policy and security matters by Republicans seem to corroborate the view. The domestic Government adopted similar measures, as doubts arose on their ability to control internal law and order. That said, the rally was also supported by corporates meeting earnings expectations. However, one has to remember the meltdown in September and early October '02 was due to these corporates revising their earnings guidance downwards. The interest rate cut by U.S Fed to forty year lows, despite statements otherwise by the chairman, also suggests a weak economy requiring another dose of stimulant. As a result, we maintain, domestic bourses are unlikely to get an external stimulus. (Read more: Global equity: Needs a new leader?)

     

     

    Equitymaster requests your view! Post a comment on "Cannot runaway from politics". Click here!

      
     

    More Views on News

    How to Ride Alongside India's Best Fund Managers (The 5 Minute Wrapup)

    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.

    Will They Haul Off Trump's Statue, Too? (Vivek Kaul's Diary)

    Aug 16, 2017

    All across the country, the old gods become devils. New, gluten-free gods take their places...

    This Company Beat the Business World's 'Three Killer Cs' (The 5 Minute Wrapup)

    Aug 16, 2017

    And what it has in common with beating the stock market too.

    5 Steps To Become Financially Independent (Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    Let's Hope This Correction Continues (The 5 Minute Wrapup)

    Aug 14, 2017

    Last week's correction is making a number of Super Investor stocks look a lot more attractive...

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    Proxy Plays: A Smart Way to Bet on 'Off Limits' Companies(The 5 Minute Wrapup)

    Aug 4, 2017

    The small-cap space is full of small players that are clear proxies to great growth stories and Indian megatrends.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    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: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    S&P BSE SENSEX


    Aug 16, 2017 (Close)

    MARKET STATS