MARKETS -LIKE A 'WAITING ROOM' TILL END OF NEXT WEEK

By Ruma Dubey

To say that markets have disengaged themselves from politics completely is being naïve. Maybe the markets were not too concerned with the poll results of Maharashtra, but yes, in a state as large as UP and that too being the populous state, the poll results do matter a lot. The numbers give an indication of the bigger picture – where the UPA is heading? And the truth that emergence of regional parties can no longer be ignored.

The market is today like a student waiting for the results – with various results expected to come, in a staggered way, the student naturally would like to wait before all results are out and then decide on the course of action. Thus spurts of action and bigger bouts of inaction is probably what we are scheduled to see till the run-up to Budget.

The ‘calendar’ for the market is choc-o-bloc. Tomorrow are the UP election results. Various exit polls have indicated various results – some say SP will win with a majority, some say it will be a hung Parliament, horse trading and alliances are already being debated and speculated upon. But in all exit polls, two things are common – the Congress will lose face badly and Mayawati is surely on her way out.  There is also talk of Congress and BSP coming toegther and that will then throw up a completely new permutation. Well, one can continue procrastinating but tomorrow, we will have the results. And that will dictate the market moods for the immediate term. If it is Samajwadi Party, markets will celebrate as Mulayam Singh is viewed as mostly pro-industry and more importantly, pro-Anil Ambani and pro-sugar. ADAG and sugar stocks are as such up today and if the results come in tune with the exit polls, these stocks will rise further in celebration.

Once the election euphoria settles down, there would be the listing of MCX, which tentatively is being scheduled for 9th March. The listing of MCX may not be a market mover and shaker but it will indicate the state of the IPO market. Investors gave a thumbs down to ONGC and if MCX lists at a premium, then it is an indication that people are more receptive to quality, logically priced IPOs from the private sector. Its listing and sustainability at a premium to the IPO price on the bourses will open up the doors for more IPOs.

And next week is huge.  We will first have the Jan IIP data coming in on 12th March which will give us an indication of what to expect from the Credit policy scheduled for 15th March.  A reduction in CRR and SLR rates will be welcomed by the market but it might celebrate very briefly as the Union Budget is marked for 16th March, immediately the next day.  As usual expectations are running high but the market knows that the economic fiscal situation is not exactly very good and the Budget will be interspersed with some tough measures. But the course of the market will depend on how tough these measures will be, the fine print of the Budget. There is hope, like always that the Budget will give impetus to growth rate by announcing measures for the infra sector.  The Railway Budget is on 14th March and though it does not have an overall impact like the Union Budget, at least railway stocks will rally, buzz, crackle and fizzle during the pre and post Railway Budget.

This week, the markets are more about ‘waiting in anticipation’ and it could all reach the zenith next week, either falling with a deafening thud or rising with a resounding crescendo.