Prime ministers like fund managers never make bearish statements. They always say the right things for who wants to scare away investors, clients or constituents?
In today’s meeting with television channel editors, Manmohan Singh made the right nosies. But the markets weren’t buying. During his speech the markets fluctuated 50 points either side of Tuesday’s close, but there was never a breakout from those levels.
That’s perhaps not surprising because investors may have already discounted most of what he had to say.
We all know that this year the economy is growing well and at an expected 8.5%. We have heard a zillion times that the government will deal with inflation while not compromising with growth. Yes, we know that PM is making an honest effort to ensure orderly Parliament.
The PM also said that the government will deal strongly with scamsters, but isn’t that expected of any functioning State? Wouldn’t that be taken as a given and be built in the prices?
If there was any one statement that should have moved the market, it was when Singh said that the budget may see the return of reforms.With past many budgets focusing mostly on populist agenda such as the NREGA and increasing subsidies, proposals to liberalise insurance and retail, to name just two, have been stuck. Sadly, the markets didn’t seem enthused by that too.
Perhaps, it’s because of the sharp 5% run-up during the past four trading sessions. Perhaps, it’s because they have heard such platitudes before.