UPA win may help in changing Market Mood

UPA wins trust, Can market win Investors ?
It was a nail biting finish to the Vote of confidence moved by the UPA government. The 45 minutes of delay in counting in 50 votes nearly stopped the breath of both the ruling and opposition parties and finally UPA managed to emerged as a stronger combination.

Expectation from the New UPA

Now with the change in composition of UPA and as the anti-reform brigade of the Left is out of the scene, the Prime minster is expected to move faster on the various initiatives to put the country on the fast growth track. This includes signing the Nuclear deal, moving faster on Infrastructure growth, bringing Insurance and banking reforms. Now this is a good news of market. Will the government gear itself to get rid of the inflationary pressure on the economy and put the country back on growth radar ? The road may not be so smooth but in short term the UPA win of course would be a moral booster for the sensex.

Impact on Stock markets
Today's rally indicated that markets were confident of the UPA win and the outcome is going to give a short term relief to the markets in terms of positive sentiments. But all depends on how the government presents itself to the investor community post its rebirth.

The bigger evils like inflation and lower IIP are not going to die down soon and government doesn't have magic stick to ward them off. Hence, the sober mood in market may not last long. Also the new partners in UPA may pose new set of challenges to the party, hence , politically also things cannot be termed to have settled till May'09 when the elections are due.

In summary, the coming week would be interesting to watch as sensex find some reason to celebrate on one hand and gets reminded of the lingering issues on the other.