RESILIENT INDIA: NORTH STAR FOR THE WORLD ECONOMY

Looks like our stock markets are on some high energy drink, bournvita or red bull, depends on your own taste and perception. Days of panic and anxiety are gone and solar eclipse is over, so investors are on a buying binge. Supported by optimistic US jobs data and crude outlook for the moment, Indian stock markets are making hay till the global headwinds are favorable. Everybody has forgotten about fiscal deficit, fiscal consolidation, veiled warnings to North block by international rating agencies and of course suggestions by every Tom, Dick and Harry of how to steer the Indian economy through volatile financial environment. So All is Well now till BSE Sensex and Nifty 50 again take a dip in the holy waters of panic and greed in case the Reserve Bank of India does not oblige with a 50 point basis cut on 4^th April.  

But what would have happened if the NDA government would have made a U turn on fiscal deficit and had taken a more contentious means of achieving growth. Nothing much, this rally which we are witnessing right now would have been delayed by few days, markets would have digested the fact that India is prepared to take on global headwinds with higher and faster growth. Actually they have very few options, de-growth in Europe and Japan, slower growth in US and China and rest of the world just going through the motions. So where is all of this headed, when is this rally going to end? Why are we so worried about bottoms and tops if we invest in fundamentally strong stocks…. If whatever laid out in the budget is implemented, we would be having double digit growth in the next 2- 3 years and Sensex would easily cross 40000. But even in utmost optimism remember, only FUNDAMENTALS CREATE WEALTH.