The previous government or the political party which led the previous Government is back again with the thumping majority; congratulations. It is very clear that Mr. Modi will hold the reins of country affairs with a firm grip for the next five years.
The Indian stock markets saluted the electoral verdict as Nifty and Sensex kissing new highs. Stock market veterans, FI is are predicting and projecting higher to very higher indices levels for the days to come. The mood of the market participants is jubilant on the Indian stock exchanges on the backdrop of resumption of the previous government. In all an optimism emerged and this optimism is purely an emotional and sentimental issue.
The markets cannot perform only on emotional issues for long. As and when the euphoria is fizzled out, the markets will start to count on fundamental issues. A trigger of an emotional issue may not be a driving force for market performance. So the readers should look on the driving forces like a continuation of economic reforms, the revival of the economy which is reeling under mild slowdown.
Markets will definitely expect from the new government the withdrawal of long term capital gain tax, reduction of corporate tax. It would be keenly watched the steps taken for the growth of the GDP, creation of jobs, government spending, etc.
So readers should be cautious while taking investment decision and should focus other issues also except a strong government.