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Jayanta Mallick

Further reform needed to take the market upwards

The new trading year, Samvat 2063, began with a thumbs up for Tata Steel counter. The stock closed with a gain of 1.62 per cent on the Muhurat Day. Though it is a token gesture by the investors on Dalal Street, it is surely indicative of the fireworks to come.

The local market is enthusiastic about the biggest Indian takeover. The power of India Inc is evident in the global market. But here lies an irony

Irony

Corus had been buying iron-ore from Sesa Goa for a long time, a little less than 10 per cent of the Indian merchant miner's total exports. Also, India's quality iron-ore deposits are behind recent attractions for global steel-makers to bring about a synergy.

Interestingly, Seas-Goa, also a darling of Dalal Street, is being forced to source iron-ore outside for re-exports. At the heart of this irony, cross currents of business interest, is a great confusion over exploitation of India's iron-ore resources in three states - Orissa, Jhkarkhand & Chhattisgarh.

Even though the Prime Minister's Office is keen to liberate ore mining in the country, hurdles are innumerable. The biggest of the lot being the political will. At the three States' levels, the importance and the potential is yet to be understood.

The India unlisted here appears to be delinked from Dalal Street enthusiasm. It is not the only example of mismatch in the growth culture, which took the Sensex to the heights of 12K and, could take it beyond. The infrastructure sector as a whole is awaiting reforms and impetus. The stock indices, which merely aggregate the growth dynamism, may go for an overkill in the short run, even for a medium term. But the long Indian story is likely to demand greater push to further upwards.

The benchmark indices may move within a range this week. The end of derivative contracts may heighten the current volatility further.

The mid and small cap stocks, however, are likely to perform better than the Sensex and the Nifty.

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