What next?

Tags: Stock Market

Hope of a stable government took the Sensex to 26,000. Will the bull run last?

What next?
This is a historic juncture in the story of the Indian stock market, and those who made a killing on their holdings in 2014 will not forget it for the rest of their lives. Especially if they were thinking of opting out in the post-2008 slowdown, when nothing went up, and everything went down. So as they savour their success, they might like to know what market veterans like Warren Buffett would advise them about the direction the market will take next. Sure enough, here’s a Buffet quote that’s quite reassuring: “In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.”

Buffett, the most successful investor of the 20th century, is no doubt well placed to sum up a whole century’s progress. But who has time to scan the horizon when you’re hooked to the ticker waiting to see how the stocks in your portfolio are doing — every day, every waking hour? As that other worthy John Maynard Keynes said, “In the long term, we’re all dead.” Now that it’s clear the much-awaited monsoon effect is diffused, and differentiated over geographies, what those playing the stock market really want to know this July is: What next?

First, a recap of the numbers. After hitting a low of 17,900 in August last year, the BSE Sensex gained almost 8,000 points to touch an all-time high of 26,000, days before the Narendra Modi-led NDA government presented its first budget on July 10.

Many market observers regard Modi’s rise to national leadership as the sole trigger for this bull run. This is hard to dispute, especially as just a year ago, the Indian stock markets were in a funk and so was the country’s economy.

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