Indian stock markets have partially recovered over the last few sessions of trading. The Sensex has gained over 3200 points since the beginning of the rally. Economists with leading financial institutions also say that the slump period is over and “green shoots” of recovery are sighted. The turning point in the industrial production cycle is expected by mid 2009.
Sensing the change in the economic scenario in India as compared to dismal performance in other countries, global investors have started investing again in a big way. Over Rs.500 Cr was the inflow in the week ended April 22. Since March 9, FIIs have invested Rs.8000 Cr in the Indian markets. Without any significant growth in industrial/agricultural sector, any upward movement of the Sensex is purely speculative and un-sustainable.
Now, the point to be seen is whether the markets can sustain these during and after the elections? What sort of reactions the markets will show for the new coalition (kichdi) government at the centre? What will be extent of long-term effects of the recession in USA in India?
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