Sensex salutes Modi return

The palpable excitement at the prospect of the return of the Modi government with a comfortable majority for the third consecutive term sent the benchmark Sensex scaling a new high of 76,468. The 3.39% rise was the biggest single-day spike in three years.

- S MURLIDHARAN

Investors' wealth, in turn, jumped Rs 13.78 lakh crore. PM Modi's prediction that "stock market programmers will get tired dealing with the rush post-election results, has come true a day early.

The index is an indicator that the market reposes faith in the government. This is why the indices have swung in all directions with almost all major stocks showing similar buoyancy. Institutional investors, both domestic and foreign, are counting on the expected labour and land reforms in the third term besides, of course, the continuity in policy. Given that the agenda for the first 100 days is already ready and it only has to be implemented, there is reason to be sanguine.

Investors abhor coalition governments, especially when there is a distinct possibility of the partners with vaulting ambitions bringing down their own government sooner or later. But will the party go on and on?

The answer is no bull rally is forever. Truth be told, the bear stranglehold is more long lasting when sentiments turn bleak on the back of global events as well as when the irrational exuberance gives way to a rational analysis.