Stock Market

Market to cheer UP verdict; keep an eye on earnings: Experts

Chillicious News

With the Bharatiya Janata Party (BJP) clinching majority in UP and Uttarakhand, experts foresee bullish times ahead for the market.

On a panel discussion on CNBC-TV18, experts predicted a gap-up opening for the markets on Tuesday and opined that this was a beginning of a bull run.

The channel’s consulting editor Udayan Mukherjee said that the market will celebrate this victory as they may not have anticipated the scale of the win.

“The victory will convince the market that they will have the same government in place for seven years and that is something that Dalal Street wants. This might lead the markets to new highs,” he said.

However, he feels that this sentiment-driven rally will settle down in some time and the focus will be back on earnings as well as global events.

Dipan Mehta of the NSE sees this as a big positive for more liquidity, both foreign and domestic, coming in the market. A new high is around the corner, he feels. Simultaneously, he also concurred with Mukherjee’s view that the market had not factored in the magnitude of the victory for the BJP in Uttar Pradesh.

Mehta feels that there is a foundation for a bull run as risk factors for the market are done for now. He also sees P/E multiples expanding further, too.

Experts also see this victory as an opportunity for Prime Minister Narendra Modi to introduce bolder policies going forward. Mukherjee feels that this will push Modi to go after black money even more relentlessly. “One can expect a lot of unconventional, radical and out-of-the-book policies to tackle black money,” he added.

Sanjay Dutt of Quantum Securities feels that this victory will give the PM more courage and power to take bold steps. He also concurs with other experts on the Street seeing a substantial gap-up opening.

Shankkar Aiyar highlighted Modi’s efforts to pitch class against class equation. Going forward, with BJP rule in 13 states, he needs to shake up these states and push them for reforms. “He (Modi) has to be the incubator to the startups that the states are,” he said.

Meanwhile, market expert Anand Tandon was of the opinion that the gap-up valuations are already stretched. He sees the remote possibility of a further rate cut rate going forward.