The Hindu Business Line : Marketmen see positive in Left move as uncertainty ends

Mumbai, July 8 With the Left withdrawing support from the Government, uncertainty over the Left issue is now over and this seems to have brought some relief to the markets.

“Markets would react positively to the political developments as a lot of uncertainty over this will get solved”, said Mr Arindam Ghosh, Chief Executive Officer, Mirae Asset Global Investment Management Ltd.

“Markets had already discounted the negative impact of political developments and in fact after the news of the Left withdrawing support the markets went up in anticipation of any policy reforms which could not happen earlier and might see the light of the day now,” said Mr Manish Sonthalia, Vice-President - Equity Strategy, Motilal Oswal Financial Services.

“Unlike earlier there is no political uncertainty now and whichever Government it be we are sure that the direction of the economy wouldn’t change,” said Mr Ajay Parmar, Head of Research, Institutional Equity, Emkay Global Financial Services.

The markets will continue to remain weak until there is total finality on issues of the nuclear deal, said a research analyst with a brokerage firm.

Reasons to cheer

With the nuclear deal having a strong chance of getting through, market participants feel there is another reason to cheer.

“Markets will respond positively to the signing of the nuclear deal as this will bring India closer to the US in a diplomatic and political manner,” said an analyst.

“Markets would react positively only once the Government has proved its majority, till then there is too much uncertainty,” said the head of research of a mutual fund house.

With the Left exiting, policy reforms might happen, and even if the Government changes, the corporate sector will stand to gain a lot now, feel marketmen.

“There will definitely be policy reforms with a change in the Government and they might be directed to benefit the industrialist class, in a way which does not harm the common man,” said the head of research of a broking firm.

“The success of the nuclear deal will help India emerge stronger and will also strengthen India’s ties with US, which again is bound to have a positive impact on the corporate sector in the long-term,” said Ms Anita Gandhi, Head of Institutional Business, Arihant Capital Markets Ltd.

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