Lead Story

All hope, no fear

Will them momentum be sustained as the market has run ahead of realities in anticipation of a Modi-led government?


The Indian equity market has been reaching historic highs of late and investors seem to be relishing the prospect of a strong and decisive government taking charge in May. Technical analysts have been predicting Nifty targets starting from 7,000+, going all the way to as high as 8,400 in this calendar year. The surging bull market since mid-February has certainly emboldened chartists, and fundamental analysts are marshalling newer and increasingly incredible theories to substantiate their ever-higher targets for the market. Earlier bull markets had their own share of such theories, like the one in the early 1990s where the low per capita consumption in India of cement, steel, aluminium, fertilisers, pesticides, processed food, personal care products, pharmaceuticals and almost every other product or service, compared with the developed markets and even some of the larger developing markets would necessitate a quick catch-up with these higher consumption economies. This was supposed to deliver untold riches to the lay equity investor in the short term.