ECONOMICTIMES.COM Sep 15, 2013, 07.38AM IST
The markets have given a thumbs up to Raghuram Rajan. And now the bulls
seem likely to cheer the appointment of Narendra Modi as BJP's prime
ministerial candidate?
"Narendra Modi has not become PM yet. There is a nine-month waiting period before the elections happen. But, this is the first time after 1984 that people are rallying around one person. It is now upto the BJP to convert that into votes. If BJP can get people to then it has a very good chances of forming the next government. As far as North India is concerned, the numbers will surprise. If BJP forms the government and Narendra Modi becomes the prime minister, it will be huge positive for the economy and if it is a huge positive for the economy, it is going to be positive for the equity market as well," says Vijai Mantri, MD & CEO, Pramerica Mutual Fund.
"Narendra Modi has not become PM yet. There is a nine-month waiting period before the elections happen. But, this is the first time after 1984 that people are rallying around one person. It is now upto the BJP to convert that into votes. If BJP can get people to then it has a very good chances of forming the next government. As far as North India is concerned, the numbers will surprise. If BJP forms the government and Narendra Modi becomes the prime minister, it will be huge positive for the economy and if it is a huge positive for the economy, it is going to be positive for the equity market as well," says Vijai Mantri, MD & CEO, Pramerica Mutual Fund.
In fact, last month Chris Wood of CLSA, in his weekly GREED & fear,
said: "Ihe Indian stock market's greatest hope is the emergence of
Gujarat Chief Minister Narendra Modi as the BJP's prime ministerial
candidate."
Also, noted economist Jim O'Neill in his blog said: "He's good on economics, and that's one of the things India desperately needs in a leader."
Quite possible that the sentiments get a high on Modi being named BJP's prime ministerial candidate.
Talking about the Raghuram, the biggest thing in its way seems to be the September 18 meeting of the US Fed.
In fact, Reserve Bank supposedly pushed back its policy meet to September 20 in view of the US Federal congregation scheduled two days ahead of this date.
What transpires in the US is widely expected to have a significant, if not huge, impact on emerging markets, especially the Indian stock market.
What happens in America on September 18 no-one knows, as is the case with what RBI's new chief Raghuram Rajan does at the policy meet two days later.
The Indian stock markets are palpably cautious ahead of these two pressing meetings, which is apparent given the way the markets have been behaving over the past two sessions.
As far as the US is concerned, that it will announce something on QE tapering is almost a given, but then the amount of withdrawal of easy money is anybody's guess. "One school of thought believes that the Fed would try its level best to reassure the markets that the accommodative stance would stay till it is required for its economy ... For emerging markets like ours, if it's early unwinding then it would mean a fall in our currency and continuity of high interest rates leading to further slip in economic expansion," says DK Aggarwal, CMD, SMC Investments and Advisors.
"On the other hand, if the US Fed takes baby steps it would provide some more time to emerging markets to take steps to build confidence and try and correct the home-grown problems," Aggarwal adds.
How will, or could, Raghuram Rajan react to keep the sentiment kicking? Experts too are pondering.
"As far as the rate action is concerned, much of it is dependent on the outcome of FOMC. I will be watching the RBI policy more in terms of the stance it takes. It will give us a very good idea regarding the contours which the monetary policy is going to take as we go along. Part of it has been explained. The forex stability is at the top of the agenda of the new governor followed by inflation management. These are positive for the bond markets per se, but I hope to be able to read more into the mind of the new governor so that we get a better idea as to how he is going to calibrate the monetary policy. From the non-rate action point of view, I will be watching the policy a little more closely than usual," says Killol Pandya, Senior Fund Manager-Debt, LIC Nomura Mutual Fund.
Source: http://articles.economictimes.indiatimes.com/2013-09-15/news/42062367_1_raghuram-rajan-prime-ministerial-candidate-narendra-modiAlso, noted economist Jim O'Neill in his blog said: "He's good on economics, and that's one of the things India desperately needs in a leader."
Quite possible that the sentiments get a high on Modi being named BJP's prime ministerial candidate.
Talking about the Raghuram, the biggest thing in its way seems to be the September 18 meeting of the US Fed.
In fact, Reserve Bank supposedly pushed back its policy meet to September 20 in view of the US Federal congregation scheduled two days ahead of this date.
What transpires in the US is widely expected to have a significant, if not huge, impact on emerging markets, especially the Indian stock market.
What happens in America on September 18 no-one knows, as is the case with what RBI's new chief Raghuram Rajan does at the policy meet two days later.
The Indian stock markets are palpably cautious ahead of these two pressing meetings, which is apparent given the way the markets have been behaving over the past two sessions.
As far as the US is concerned, that it will announce something on QE tapering is almost a given, but then the amount of withdrawal of easy money is anybody's guess. "One school of thought believes that the Fed would try its level best to reassure the markets that the accommodative stance would stay till it is required for its economy ... For emerging markets like ours, if it's early unwinding then it would mean a fall in our currency and continuity of high interest rates leading to further slip in economic expansion," says DK Aggarwal, CMD, SMC Investments and Advisors.
"On the other hand, if the US Fed takes baby steps it would provide some more time to emerging markets to take steps to build confidence and try and correct the home-grown problems," Aggarwal adds.
How will, or could, Raghuram Rajan react to keep the sentiment kicking? Experts too are pondering.
"As far as the rate action is concerned, much of it is dependent on the outcome of FOMC. I will be watching the RBI policy more in terms of the stance it takes. It will give us a very good idea regarding the contours which the monetary policy is going to take as we go along. Part of it has been explained. The forex stability is at the top of the agenda of the new governor followed by inflation management. These are positive for the bond markets per se, but I hope to be able to read more into the mind of the new governor so that we get a better idea as to how he is going to calibrate the monetary policy. From the non-rate action point of view, I will be watching the policy a little more closely than usual," says Killol Pandya, Senior Fund Manager-Debt, LIC Nomura Mutual Fund.
Most probably the US is likely to go for a tapering to the tune of $10
billion. What if the US tapering is in line with expectation; will it
mean a bull run of sorts for the market? "Fed will get into tapering by
sensitising the markets. They have already made some statements in that
regard. I think it will be a 'taper light' situation ... you might see
that as a little bit of rejoicing, which already has been in the
emerging markets, that might continue for some more time," says Vikas
Khemani of Edelweiss Securities.
Even if it's a little bit of joy for the market, will it last? "Tapering is more or less priced in. If the tapering is light, emerging markets will rejoice in the short term. Currencies will recover, but that would be a short-term phenomenon," says Vikas Khemani adds.
Even if it's a little bit of joy for the market, will it last? "Tapering is more or less priced in. If the tapering is light, emerging markets will rejoice in the short term. Currencies will recover, but that would be a short-term phenomenon," says Vikas Khemani adds.
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