Going by the latest Media report, brokerages and analyst views, Market is too optimistic about the Narendra Modi led BJP government. We certainly can feel the anti congress sentiments but Narendra Modi if elected to be next Prime Minister, will assume office with lots of elevated hope and optimism.
Even a good administrator like him will find it tough to resolve some fundamental issues and it will take some time. Investor needs to understand the power dynamics between State Politics and National Politics and there lies the catch.
Need of the hour is a Government who delivers on Governance, Policy decision and Predictable / stable regulatory regime. Going by the history of the past 20 years, the candidate who has never been projected as PM has assumed the office ,be it P. V. Narasimha Rao, H. D. Devegowda, I. K. Gujral or Manmohan Singh . Its interesting to see if Modi can break this tradition.
One also has to brace for a Modi minus – BJP led NDA government. Stock prices have been exploded in the last 2 months on perception change and real economy will take its own time to turnaround. Analysis shows that only a handful of NIFTY/ SENSEX companies have participated in recent run up. Some of the key feature of stock market rally are narrow base, No leverage position in system, pathetic retail participation coupled with volatile market movement.
Though Modi is the best choice for Business community the much needed mark of 272 may not come easily. As result day draws nearer, drama will unfold and reality might not sync with the projection made by people at Mint street.