New Delhi: All wholesale commodity markets, including those of metals, will remain closed on Monday on account of Holi. The Bombay Stock Exchange (BSE), the National Stock Exchange (NSE), forex and commodity futures markets will also be shut.
The holiday assumes significance against the backdrop of the BJP’s landslide victory in Uttarakhand and Uttar Pradesh elections, results of which were declared Saturday. The impact of the elections results will now be seen only on Tuesday, 14 March.
A victory for the BJP in Uttar Pradesh is seen as an affirmation of Prime Minister Narendra Modi’s policies especially since the assembly elections were held against the backdrop of the controversial invalidation of 86% of the country’s currency notes in November.
Indeed, the BJP victory and the positive sentiment around measures such as quick implementation of the goods and services tax (GST) have helped Indian stocks rally at a time when corporate earnings growth is nothing to write home about. So far, this year, the Sensex and the Nifty have gained around 9% each, slightly better than the 7.4% gains for MSCI Emerging Markets Index.
BJP’s victory in Uttar Pradesh will also give legs to the rally when it is all but certain that the US Federal Reserve will hike interest rates when it meets on 14-15 March. Higher US interest rates will make the dollar stronger and emerging market assets less attractive. Foreign institutional investors have pumped in $2 billion so far this year after withdrawing $4.6 billion in the last three months of 2016.
That said, some experts also cautioned about rising valuations and the fact that this rally has been entirely driven by easy money. Read more