COLUMN: Nifty seen scaling 6000 after govt wins retail FDI vote

Wed Dec 5, 2012 11:53pm IST

People look at a large screen displaying India's benchmark share index on the facade of the Bombay Stock Exchange (BSE) building in Mumbai April 2, 2009. REUTERS/Punit Paranjpe/Files

People look at a large screen displaying India's benchmark share index on the facade of the Bombay Stock Exchange (BSE) building in Mumbai April 2, 2009.

Credit: Reuters/Punit Paranjpe/Files

Related Topics

(The views expressed in this column are the author's own and do not represent those of Reuters)

By Ambareesh Baliga

The UPA government was expected to easily win the FDI-in-retail vote in the Lok Sabha. Still, the markets took a breather over the last two trading sessions as friends and foes in politics are quite unpredictable.

In the end, the midnight oil burnt by the backroom boys of the ruling Congress did meet with success, with both the Samajwadi Party (21 MPs ) and Bahujan Samaj Party (22 MPs) abstaining from voting.

The markets will most probably open with a gap and we could scale Nifty levels of 6000 and more on Thursday, but higher levels should witness some profit booking as the Rajya Sabha is expected to the take up the bill for voting.

The direct, sentimental impact of FDI in retail would be felt on major sector players such as Pantaloon, Shopper's Stop, Trent, Provogue and some realty players with exposure to the sector -- Indiabulls Real Estate and Phoenix could see further gains.

I would advise investors to utilise this rally and book profits as I don't expect foreign retail majors to immediately rush in to invest in existing players.

This win would have wider implications in terms of the government's confidence to push through pending bills and continue with the reforms process started in September, thus improving overall market sentiment.

I expect the markets to scale new highs early in 2013, prior to the budget in the absence of major roadblocks. Again, utilise any dips or consolidation in the market to buy "India-building" sectors such as capital goods, infrastructure, banking and autos as they would be the leaders in this rally to cheer a rejuvenated government.

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Earnings Season

Earnings Season

Reliance Q4 sales rise, refining margin narrows.  Read 

Innovative Solution

Innovative Solution

Turning smog into jewels - a Dutch designer's solution to Beijing's pollution.  Video 

Insider Trading

Insider Trading

Rajaratnam's brother loses bid to dismiss insider trading charges.  Full Article 

Literary Giant Dies

Literary Giant Dies

Mourning and memories in Gabriel Garcia Marquez's languid hometown.  Full Article 

S&P on India

S&P on India

S&P: India's ratings to depend on next govt econ, fiscal policies.  Full Article 

Ambitious Aim

Ambitious Aim

In green car race, Toyota adds muscle with fuel-cell launch.  Full Article 

Bond Market

Bond Market

A star abroad, RBI boss riles bond traders at home  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage