The love-hate affair of Indian stock markets with Indian government

This news item from BS is really interesting. It talks of how stock brokers’ lobby had requested SEBI to open markets for extended hours to “fully factor” in the poll outcome! The markets are open for nearly 7 hours anyways and what would an additional 1.5 hours do except the hype and speculation?

Next time any analyst says politics does not matters for markets and it moves on so called economic fundamentals. should be trashed right away.. P-word matters greatly..

The markets have piled on huge amounts of money in last 3-4 months expecting BJP coming to power and all ills/sins of the economy will be wiped right away. There is little doubt that 16th May will be a highly tensed day with both political and economics analysts having a field day. But then the economics experts usually go wrong. In 2004, the markets hit a lower filter as UPA was sworned in. As economic outcomes were way better than expectations in 2004-09 (f0r whatever reasons), the markets rose sharply when UPA was sworn back in 2009. This time economic fortunes reversed leading to an outright rejection of UPA. Since then hype around BJP and its business-friendly approach (the same party which was ridiculed for being swadesi) has caught the fancy of the media and experts.

I mean it is all amazing to see how all these guys build stories and hype around political outcomes. The purpose is markets should just go up come what may. Just a couple of years back, media/markets went in a frenzy as so called young Chief Ministers were elected in UP and Punjab. What has been the economic outcomes in both states?

I mean Indian political economy is a hugely complex affair and one should not expect miracles. The slow and steady approach is the way to go. And all these market guys have been proves wrong time and again. Why should we care but thus hype is always given enormous coverage. All this indoctrination comes from the huge lies which have been spread around development. Most advanced countries of today faced huge political problems on their way to development and there was large state intervention. India is far more complex given its history and will take a while for things to move.

One understands the need for development, but this whole hype over overnight miracles is too much to handle. Actually, it is much better to close markets early and watch the play out of political outcomes. Idea should be to conserve energy for the next five years (provided the govt lasts) and not spend it at one go.

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