By Ruma Dubey

Today was the first day of FY18 and what a day it has been! The BSE is “Oh! So close!” to the 30,000-mark and the NSE too hit a record high and 10,000 does not seem too far away. It is like as though the market wants to convey to the world – be it 1^st Jan or 1^st April, Indian markets are on a high!

There was a sense of stubborn optimism on the street, any and every news, however inane it might be was met with new highs! That sense of ‘hope’ was all pervasive. A good spot to be in. This probably explains why Reliance Industries hit a none-year high today. The news was nothing as big as what the market made it out to be – Jio extending its Prime subscription by 15 days. On any other day, this would have been regular news as the super success of Jio has already been discounted. This is what we meant when we said – all pervasive sense of optimism.

And this is also what probably explains the FIIs getting onto the buying bandwagon. We say “bandwagon” because FIIs usually follow the herd mentality – when one buys, most others follow and vice versa. In March alone, FIIs have been net buyers to the tune of Rs.23,435 crore which statistics show is the highest ever monthly buying ever since Feb’13. And in the last quarter of FY17, FIIs bought stocks to the tune of almost Rs.54,000 crore. With the interest cycle turning around in the USA, they have obviously turned their eyes to India – one of the best bets in the emerging markets, with a stable political environment and a Govt which has an eye on economic progress.

There is a growing sense of protectionism growing all around us, yet India does have this feeling right now that if the Govt does work on reforms, concentrates less on welfare schemes only, we could hit the jackpot!

GST is a reality and we could see it coming into effect from 1^st July. We really hope that the Govt does not get into loan waivers as India simply cannot afford to do this anymore. Our NPAs have snapped all levels and reek of an economy which is bourgeoisie – we really want to eat the cake when we cannot even afford bread! So the Govt needs to make this difficult decision asap – one way or the other so that banks know where they stand.

There is hope that in FY18, the Govt will continue with its fight on black money, make the society more cashless, track every paisa which comes into the system. The Govt also needs to get working on NPAs and make our banks strong – currently the banks look fat with no muscles; it is bound to collapse under pressure! Private sector investment is slow and that is something which the Govt needs to work on – gets the projects which are stuck going.

The immediate “look forward” factor is the credit policy. No interest rate cut is expected but we still hope. Earnings in Q1 are expected to get better and compared to FY17, the outlook for the current is more optimistic. Farm output could be dicey and there is real risk of inflation raising its ugly head, threatening a fatal bite. Over the last few days, we are seeing capital goods companies reporting good order intake but implementation remains a question mark as nowhere are we seeing revival of investments.  On the US currency front, the rupee vis-à-vis the dollar is appreciating and coupled with the lower crude prices, and this is giving a lot of dollar-debt companies living nightmares. Yet, at the same time, thankfully the crude prices remains low and that is indeed some relief, which will boost the treasury chest.

Life is about looking ahead; constantly keep on moving like the fresh gurgling waters from the mountains, gushing down with sprite and zeal, despite knowing that there are huge rocks in their way. So for now, let us enjoy the first day of a new fiscal and keep the hope alive.

PS: Don’t want to be the party pooper but keep a watch on the rains; that is the only spoiler on the horizon what with El Nino also raising its ugly head.