Markets
are clearly in a consolidation mode, post a 400-500 points rise on
the Nifty
following
the reforms announcements, which has absolutely surprised everybody
on the Street. The result seasons could be used as an excuse for the
markets to consolidate. Yes, I also feel that it could be a time
bound correction. Possibly, post that the market can make another
attempt to go towards the 6000 mark as far as the Nifty goes. The
uptrend right now could be halted and it is happening across the
world.
Even
globally, the markets are consolidating post the liquidity driven
risk on rally which we have seen. As far as India goes, a 400-500
points rise on the Nifty has happened mainly because of the reforms
announcement, up thrust could be depleting right now. For more things
to happen more reforms have to happen and for all this the government
needs to play an important role. The investment cycle needs to be
kick-started whether it is land acquisition, the environment
clearance that needs to happen. Whatever has happened so far is not
going to do too many things.
As
far as the monetary policy goes, while the market is keeping its
fingers crossed despite the inflation numbers yesterday, I feel the
monetary policy has a very limiting rule for reviving the market or
reviving the economy. What needs to be done is the reforms push for
kick-starting the investment cycle.
Right
now what we are seeing is only the consumption cycle is on, the
investment cycle is virtually dead and that needs to be kick-started.
For that, the government needs to do a lot and if that happens, yes
it is distinctly possible the market will make its next attempt to go
towards the 6,000 mark and possibly above that also.
