Click to play videoToday is a piece of history. It's a historic day for our market and we have never seen a bigger day in the history of our stock market. Ironic, isn't it that it came on a day when everybody is talking of political uncertainty.
It almost seems a fait accompli that the current government will fall and in the midst of that political uncertainty, the market has gone on to post a new high and broken past 18000 and posted a 1000-point rally from the lows of the day today. If this is not a bull market, you should ask what is!
It's a stuff of history today. It's completely amazing and especially for the market to do it after what happened on Monday. On Monday, political cloud short of engulfed the market mood, the mid-caps got slaughtered, the Sensex lost 300 points.
We came in on Tuesday morning with aftereffect of what happened on Monday. Within minutes of trading the Sensex was down a couple of hundred points and from there, the recovery started and we ended 800 points up and in the process took out 18000 with effortless ease.
This has been a fantastic move from the market, prompted on part by short covering because yesterday the people in the market got bearish. They might have shorted the Nifty and today was the time to cover up the positions as the market rallied.
The Midcap, which fell so hard yesterday, also bounced back significantly and the gush of dollars into the system continues unabated. That's the reason why the market has been able to deal with the political news.
There might be a message in the screen today. And that might be that the stock market probably has distanced itself from politics and politicians. They can carry on with what they want to do in New Delhi, but the market is not sulking and falling off in a big way or getting into a tizzy because of that.
Of course, part of the relief might have come in because of the deferment of any decision on the part of any party till October 22.
But more than that I think the market has evolved quite a bit in the last few years, helped on by the flow of dollars and now probably politics doesn't matter so much to the financial markets, which is an extremely comforting thought.
It's a big day, historic day, cocking a snook at politics and politicians, that's what you want to see from the screen, don't you?
Where do we go from here?
Where do we go from here?
I think the message is clear that too many people are waiting for big corrections to buy and when those corrections come, they don’t buy. At 18,300, you should ask yourself whether there is national hysteria or euphoria about stocks and I think the short answer to that is no.
We have seen national euphoria during the Harshad Mehta days, we have seen national euphoria about stocks in the Ketan Parekh days; today there is no national hysteria about stocks, there is no great mass participation.
People are still extremely under-invested in India and simply going by that token, this market is not ready to top-off yet. I do not think we have seen those.
Rather, what we have seen is extreme degrees of scepticism at every higher level in the market, which is perhaps precisely the reason, why this market is refusing to correct. People are not invested, they are crying for corrections, they want to see corrections, and the market is just not in the mood to oblige them.
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