Struggle to make money from stocks

Labels: Construction, Economy, Engineering, Equity, Equity Market, Future, India, Stock, Stock Market, Stocks

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It's been some time since I wrote in this blog, and things have changed a lot since then. The overall political environment in the country has taken a deep turn for the worse in the past couple of months, with scams affecting the image of the Government to a great degree, implicating the even honest image of the Prime Minister. Further, the economic and monetary policies seem to be moving in a direction that is not very conducive to growth, such as a high rate of inflation, and a result, the Reserve Bank seems to want to limit money supply by raising interest rates, which in turn will lead to a contraction in the amount of capital available for companies to finance their growth and lead to a reduction in the growth rate of many companies.
As a result of all this, and because there seems to be a slight positive movement in the economy of the United States, FII's seem to be selling in the domestic market, and are also repelled by the amount of the scams, which increases the perception of a high degree of corruption in India as a whole, something that is seem as harmful to the working of companies.
In the past 2-3 months, there has been a sharp fall in the value of mid-caps with many portfolios falling by 20-25%, a sharp drop that is not fully mirrored by the value of the Sensex. So what does one do about stocks ? If you believe (as I do) that in the next 2-3 years, there will be a continuing fast growth, then a drop in mid-caps and some large caps is a good opportunity to buy, so am tracking stocks such as:
1. Elecon Engineering
2. Reliance Industries
3. Bharti Airtel
4. Pipav Shipyards
5. Hindustan Construction

Labels: Economy, Equity, Equity Market, Future, India, Indian, Stock, Stock Market

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Contrary to most expectations, the Indian stock market has been on a rise, going up and up. This is inspite of the fact that the most recent index of Industrial Production (for August) has seen a downturn (with the most recent rate being 5.5%, compared to a much higher level just a couple of months back). Further, the market has seen a huge influx of money from Foreign Institutional Investors, to the extent that the Government is contemplating putting some curbs on this inflow. The Sensex is reaching levels that were last seen in December 2007 - January 2008, and we all know what happened to the market after that.
Inspite of the fact that past statements of caution and doom seem to have been defeated by the market, we should continue to remain cautious and be careful with putting more money in the market. Stocks that remain fundamentally safe are fine to hold, but if there are stocks that have jumped up significantly, then cashing out for atleast a portion of such profits is the sensible approach. Some of the shares that I am currently tracking:
Western Shipyards
KNR Constructions
Action Construction Equipment
Coromandel Fertilizers
Andhra Sugar
Bajaj Finserve

Labels: Calls, Economy, Equity, Equity Market, India, Stock, Stock Market

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As predicted, the Indian stock market is becoming much more volatile. In the last couple of days, we have seen the usual conditions of volatility such as the large cap going up, while the middle caps have been extremely volatile. The Reserve Bank is predicting some increase in inflation, and hence has raised some of its rates by a small amount.
For the last many weeks, most retail investors have actually tried to increase their cash levels by selling out those scripts where there is a profit, and trying to stay on the sidelines in this volatility. This is what is recommended to most investors, unless they are confident of their involvement in the market, and about the script they are holding and can take the losses that may occur. At the same time, there is news about sugar scripts that may be worth buying, given some losses in sugar crops and a potential hardening of the prices.
Some scripts that I am actively tracking:
Voltas
United Phosphorus
Jyoti Limited
Punjab Woolcomber
Ponni Sugar

Labels: Equity, Equity Market, India, Investment, Stock, Stock Market

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The Indian stock market is getting very volatile nowadays. It reminds me of the days near January 2008 when the market was very volatile, with the Sensex going up by large numbers or falling, but with most stocks remaining where they were or sometimes even falling. There is still money to be made in specific scripts, but it is a high risk / high gain approach. If there is a fall due to liquidity inflow into the system being reduced, then even scripts that seem safe can fall pretty fast (we have seen the effect of what a reduction in liquidity and bad sentiment can do to all stocks in the multiple falls that happened in 2008). Right now, DII's (domestic financial institutions are selling) while FII's are pumping in money; but this inflow is always volatile. Every expert says a couple of things - India has a good economic growth ongoing, and Indian stocks are expensive. The possibility of a small sharp correction is pretty high right now, so be careful about the stocks that you are going in for.
There are positive news for the medium and long term - the figures for industrial growth were higher than expected, which means that Indian industry will pick up; at the same time, there will be a need for more credit and working capital, as a result, most predictions are that the Reserve Bank will increase interest rates to head off the expected increase in inflation.
Some stocks that I am currently tracking:
Reliance Industries - the stock remains a safe bet, and has shrugged off some recent weakness where there were predictions that the stock could fall to 600 levels
Uflex - the stock has run up sharply in the last couple of months, but the company remains a fundamentally good company in a good sector
Kirloskar Pneumatics - Run up a bit in the last 1 month
Rajesh Exports - Looking good technically
Rama Newsprint - A turnaround story
Shanti Gears
Cosmo Films

Labels: BSE, Equity, Equity Market, India, Market, Midcaps, NSE, Recommendations, Stock, Stock Market

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The market has been oscillating a bit in the past few weeks. After doing increases in the past few months, there is a lot of speculation that the market is over-heated, and it is only the inflowing liquidity that is causing the market to go up. At the same time, the Government and the economy are all giving positive signals for the overall condition of the economy, which boosts sentiment (although it must be admitted that all the sentiment is overall feeling that a crash is imminent and is healthy for the market).
The US economy seems to be taking a slight up for the better, and that is a good sign overall. The Indian economy needs to hear that the talk of a double-dip recession is not going to happen, and that things will remain good and that the Indian economy will continue to have a good rate of growth. If this continues, there will be periodic dips in the market but the overall trend will be positive, which is what the stock investors of the country need.
Some stocks that I am tracking:
Action Construction Equipment
Ashhiana Housing
Jindal Poly (has gone up hugely in the last few weeks, but some scope still remaining)
Rama Newsprint (more long term)
Talwarkars
Western India Shipyards

Labels: Economy, Equity, Future, India, Indian, Stock

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The Indian stock market is right now pretty directionless. The overall sentiment is more towards caution, wait and watch, and see whether there are any drivers towards increasing market movement. There are a lot of people screaming for a correction to happen, talking about it news articles, in blogs, updates, and so on.
The world economic situation is also fairly unstable; the 2 largest economies - the US and China both have their own problems. The US is being threatened by a dip back into recession, and China (even though it still posts huge increases in the economy) is starting to face its own problems in terms of some amount of social discord, more openness threatening to showcase some of the problems that China has hidden away. The EU zone is not doing so well either, and there is a movement in the EU to clear their debts through austerity measures, which are good for finances but do have an effect on consumption.
In India, the Government finally cleared the long pending Direct Tax Code, but no major changes in it; the Government kept on giving up on most of the reform measures, and has kept a number of exemptions in the code which was something that was supposed to be cleared from the DTC.
In terms of stocks, given the uncertainty in the market, if you are holding more volatile stocks, you should really get out of them unless you are able to take the risks. Invest in stocks you feel strongly about. Some of the stocks that I am currently tracking:
1. Reliance - I continue to feel enthusiastic about this stock in the long term
2. Action Construction Equipment - A small player, but seems to be well managed
3. Balaji Amines - Well posed to increase in value
4. Elecon Engineering
5. Uflex India
6. Jindal Poly

Labels: Economy, Equity, Finance, Fundamentals, Future, Global economy, India, Indian, Market, Stock

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Interesting times in the Indian market. The Sensex is dancing near the 18,000 mark, even as the overall global economic indicators are none too good. There are already articles that are again talking about a decoupling of India and China (and we knew what happened the last time there was a of talk about decoupling of India and China from the overall economic situation, the pullout by FII's decimated the Indian indexes).
There is speculation in the market that the next couple of weeks could see a period of slowness, and maybe some amount of pulldown, so am evaluating all my current stocks to see which of these I can cash out and stay in atleast anywhere between 30-40% cash.
Stocks that I am currently tracking:
1. Action Construction Equipment (CMP Rs. 53)
2. Camlin (Rs. 34)
3. Bartronics (Rs. 150)
4. Exide Industries (Rs. 106)
5. Hind Rectifiers (Rs. 69)
6. Vimta Labs (Rs. 36.5)

One group that uses mathematical calculations to determine the technical targets for investing (link)

Labels: Economy, Equity, Future, India, Indian, Market, Stock

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I have been not been updating this post for as much as 6 months (been very busy), but now that I am back to investing on a regular basis in the market, I will be much more regular in updating this post.
The overall economic situation the world over remains fragile, with the biggest economy, the US, still not seeing broad positive signs. Unemployment is still high, does not show signs of changing dramatically for the better; the housing and consumer markets are so-so, with worries that things will get worse. In addition, due to political pressures over too much money being spent which is distorting the budget deficit, the major stimulus problems are now in threat with Obama not being given the level of money he desires.
In Europe, even with some of the economies worried about defaults, including Italy, which is a G7 country and a large economy, there is an opposing argument that is gaining ground, which is that the budget deficits and overall debt are getting unsustainable, and the Governments will have to go in for belt-tightening, something that the British Government is now going in for.
What does this mean for India ? Well, even though the Indian economy is doing great, and the monsoon seems okay for now, we have seen in the past that when the world economy goes through strain, the investments in the Indian stock market get affected and can cause lowering of the index, affecting all stocks. So, the prognosis right now is, buy stocks that you see are fundamentally good, in sectors that are not going to be directly affected due to any export problems (so avoid IT), and be careful in your investments.
Some stocks that I am currently tracking along with current market price (and I do not do price targets, just stocks that I am interested in):
- Action Construction Equipment (Rs. 49)
- Camlin
- HEG
- Patel Airtemp
- Polyplex Corporation
- Supreme Industries (an old favorite)
- Western India shipyards

Labels: Economy, Equity, Fundamentals, Future, India, Stock

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The Indian stock market has seen a recent high, even though there are sporadic days when the market drops (although the drops have not been of the type that we would see earlier) when the market would suddenly drop by 200-400 points in the last one hour of the market. The growth rate in the Indian economy seems to be on the higher level, the Government is making all the right noises about continuing the growth stimulus and disinvestment of PSU's. However, the global economy still has a long way to go. China seems to be going strong, but a recovery in the US still is in fits and starts, and not a clean recovery.
Right now, the market has jumped up a bit, and there are fears of a correction imminent, but the trend overall seems to be that the market will keep on going higher (but one should have the courage to take the roller-coaster ride that comes with such a movement). For the past several weeks, I have been also looking at studying more technical indicators so that can see stocks for the short 2-3 weeks, as well as for longer periods.

Fundamental based stocks:
Mahindra Ugine - Rs. 60
JBF Industries - Rs. 102
Indiabulls Securities - Rs. 36
Sharyan Resources - Rs. 88
Walchandagar - Rs. 225
Rishi Lazer - Rs. 55

Technical trends upwards:
Andhra Bank
Asista
Maral Overseas
Bajaj Finserv
Financial Technologies

Labels: Equity, India, Indian, Stock, Tips

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So what happens next in the Indian stock market ? There are different predictions about what the future holds for the Indian stock market, but the different predictions are more about the short term. There are different indicators on whether for the short term, the markets have climbed up to a bubble level, or whether there are indeed reasons for such a jump. It is predicted that part of the growth in the US (the so called green shoots) have been over-inflated, and that growth in the US right now is nebulous, with it being a jobless recovery.
For the middle and long term however, things are much more positive, with the overall global economy having seen an uptick, and both India and China looking much more positive. India seems to have overcome the worry of a failed monsoon, although it is likely to impact Government policies in terms of foodstocks and its food imports. So what are the stocks to be watched out ?
1. Mahindra Ugine Steel Company Ltd (good for the medium and long term, but needs patience)
2. Ashiaana Housing (if housing market is not a bubble, then very good for the long term)
3. JBF Industries
4. Shilpa Medical (risky, but can grow multiple fold)
5. Elecon Engineering
6. Central bank of India

Also, started to look at more technical information. What is the difference between Technical and Fundamental Analysis (very briefly) ?
Fundamental Analysis is the study of the fundamentals of the market. Fundamentals are all things that affect the supply and demand of the underlying commodity.
Technical Analysis, on the other hand, is the study of the market based on a chart of its price data, and assumes that you can do some amount of prediction of the price and volume movements based on past trends.

Labels: Economy, Equity, Fundamentals, Future, India, Learn, Market, Technical

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This post is about a tool available on the BSE website (link to actual tool) that allows you to find companies having a specific criteria. There are people who only want to invest in small size companies (betting on a higher quantum of risk), and there are others who want the safety of large caps. People also have criteria based on the EPS for the company (it tells you whether the company has a good return), and also the PE ratio (since a correlation between PE of a company and that of its industry indicates whether the company share price could increase).
You can select the following parameters:
LTP
Market Cap
EPS
PE
From the site:

This section will enable you to fine tune your search of stocks. Here you can search stocks based on the 4 fundamental parameters of the company's performance.

Labels: BSE, India, Parameters, Search, Stock

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We are approaching a stage where the market is seemingly over-heated. Quite a few mid-caps have shows levels that are 3-4 times what they were just a few months back, and even with improvements in the overall market, there is a sense of uneasiness. I was speaking to somebody who does deals (M&A), and he was of the opinion that this resurgence has already gone to promoters head, they are back to asking for high rates for their companies capital that was seen before the melt-down, and this was substantiated by a report in the Economic Times that claimed that deal makers are headed off to China rather than India since they do not see too many deals happening in India.
The US economic data seems better, but there are blips when the economic data seems to suggest that one needs to watch signs of recovery carefully, and not assume that everything will go fine. What this translates into for the retail investor is that you should be careful, do not start to again assume that stocks will only go up. If you have made a lot of profit, then remove some of that profit and put into safer instruments, and use the remainder to play in the market. One thing we learnt from last time is that there is no easily defined floor below which the market would not fall - it kept on falling for many months, and retail investors kept on waiting.
Stock that I am current tracking (or buying):
1. Rishi Lasers
2. KLG Systel
3. Supreme Industries
4. Patel Airtemp
5. Nilkamal
6. VST Tillers
7. Reliance (long term)

Labels: Economy, Equity, Future, India, Profit, Stock, US

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Overall, there is a mood of optimism. Even though exports have been falling, there is a feeling that it is only a matter of time for the market and the economy to be a upward trend. The plentiful rainfall of the past few weeks has reduced the rain shortfall this year to a much lower level, decreasing the potential problem caused by drought and lower drop output.
The Index of Industrial Production has gone up slightly, realty and consumer goods are starting to pick up, and so on. At the same time, the market has jumped to good heights in the last few months, and there is an over-whelming feeling that the market may be due for a correction, with a contra statement that times are going to be better, and the market is just factoring that in. At these times of high, it is good to get rid of junk and penny stocks.
Stocks that I am currently tracking:
1. Divis Laboratories (more stable, long term)
2. Jaihind Projects (more risky)
3. Nirlon (risky)
4. Unity Infra (risky)
5. Rishi Laser (long term)
6. Godrej Industries (short term)
7. Asahi India Glass

Labels: Equity, India, Indian, Opinion, Price, Shares, Stock

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For the last couple of days, the Indian stock market has not been reacting as one would have liked. After a good upward move on mid-cap stocks in the past few weeks, there has been a small correction in the last 2-3 days, with the market falling around 100-200 points per day. One can hope that this is just a consolidation phase. The overall trend for the future in terms of growth looks impressive, with GDP growth being higher than in previous quarters, although one has to worry about what the failure of the monsoon means for the country.
Mid-caps seem to be again the flavour of the season, and some of my mid-caps (risky ones though) have gained a bit in the last one month, atleast 15-30%, which is good growth. These are across sectors. Some of these stocks are:
Nirlon- This is a real estate story, with the company having developed some good commercial real estate, and if commercial rents pick up, then the company has a good story on its hands.
Ashiana Housing - the revival of the realty story means that well regarded companies do well, and Ashiana Housing is one of these companies. The company has gained from a low of 45 to currently 62.
Hindustan Constructions - The company has yet to gain significantly, but I am cautious about the long term prospects of the company.
JMC Projects - The company is doing well, and is a well regarded small player in the construction / engineering area
KLG Systel - The company has seen a massive fall in its valuations since January 2008, but is now on the recovery path, having increased to 2.5 times its value of last October. It is a well regarded provider of solutions to the Government.

Labels: Equity, Finance, India, Money, Stock

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The Indian projections in the short and medium term (6 months) for the stock market are in a bit of a flux. The US recession has been declared to be on its last legs by the Fed Chairman, Bernanke; however the facts on the ground are a bit uncertain. The housing market (where the entire problems started) seem to be looking up, but the same is certainly not true for the jobs market where the joblessness claims in the US have only gone up in the last couple of months, confounding experts who expected that signs of a recovery would come with fewer jobs getting lost.
Even other critical parameters such as consumer purchasing (critical for an economy like the US) are not delivering on the promise of a improved recovery. In addition, there is some real bad news coming out from China where the market has reacted pretty adversely, giving jitters to the market overall. However, and this is the most confusing part, it would seem that the markets worldwide (especially in the US and India) seem to be fore-casting a recovery in the next 6 months to 1 year.
In India, there are some reasons to be cautious about such a recovery, even though India never went into a recession; the growth got reduced, sentiment was very badly hurt, and the stock market had a literal collapse. Right now, the drought has complicated matters, and both the drought combined with the still increasing swine flu will knock a couple of points off the growth rate and cause severe jitters to the Government.
The time is not bad to make investments in some stocks, and here are some stocks that I am tracking:
Whirlpool - With more Indians entering the middle class, the growth rate of consumer appliances is only likely to go up in the long term, and Whirlpool is poised to join in that growth
Bartronics - The company had shown a lot of promise in the year 1998, but the crash had crushed any positive news of the company. However, now reports are increasing the prospects of the company being able to gain from projected boon in RFID usage
Companies in the infra-structure area will increase as the rate of GDP growth increases, even though there remain concerns about stretching themselves thin, and having working capital problems. Companies in this area include Gayathri Projects, Core Projects, Kalindi Rail, Hindustan Contstruction, Gujrat Apollo, Jaihind Projects, JMC Projects
I am also starting to evaluate more risky areas, such as when companies are seen as potential targets, and you get multiple companies fighting for these. There is some good short term money to be made if you can identify.

Labels: Economy, Equity, Future, GDP, Growth, India, Indian, Infrastructure, Investment, Stock

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I read an article that took a situation where a person was in real trouble financially, and what the person can do in such a situation that could help. The situation was one that many of us can relate to - in times of good money and a good job, your finances and projections for the future are good, and you decide to invest for the future. You take a loan for the house that will be an asset for the future, you invest the remaining money in stocks (after all, equity is the way to grow your money for the future), and you get a car to travel in comfort along with your family. And then disaster strikes - your house loan amount was high (higher as a percentage of monthly take home salary that you would like - should not be more than 40% of take home after taxes and other deductions), and it got higher as interest rates went up, the stock market collapsed, and then the worst of all, you lost your job. So, what do you do ? (link to article - read it till the end, the situation may not be exactly the same, but there will be similarities)

He decided to approach a debt counseling centre for his financial hassles. They showed him the right way to manage his finances. They also mediated between him and his bank. He also obtained written consent from the bank that he would resume repaying his loan once he got a job. In such situations banks do oblige you if you manage to repay most of the money or part of the money if not all as it was a better deal than no money at all.
1. Try to lower your interest rate. Negotiate with your bank. One other way is to convert your credit card debt into a personal loan debt. It will definitely be lesser than the credit card interest rate.
2. Calculate your net worth and see if any of your investments could help you prepay a part of your loans.

More tips are there in the article. The main point is that you should be careful of your finances rather than falling in this trap, and if you do, then get help, speak to the bank and explore other means of financing (except for high-interest loans).

Labels: Bank, Finance, India, Job Loss, Loan, Negotiate, Personal Finance, Recession

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The market is behaving a bit unpredictably, with sudden ups or downs, even though the fundamentals have remained roughly the same. Many people would argue that this is exactly how the market behaved in the last few years, so this up and down is actually consistent. One needs to consider the different factors involved in taking the market up or down:
1. World wide market moves
2. Indicators of the recession worldwide and in India
3. Macro economic situation in India, such as whether monsoons will be good or deficient, whether the Government is hoping for a improvement in growth, changes in overall economic mood
4. Policy measures by the RBI or by the Government, such as interest rate movements, monetary and fiscal policies, disinvestment and reform, or the blocking of such reforms
5. Overall political scenario, where the Government is seen as stable, or too dependent on its allies and hence prone to instability
6. Influence of the Communists and Leftists
7. Overall sentiment, such as if the market has moved too much in the recent past, time for a correction, or vice versa
And so on, but these are the chief reason for the movement of the stock index.

Now, what is the current position. India is not in a recession, but growth is very sluggish and the monsoon shows every chance of being deficient in the northern states, leading to an effect on the economy. At the same time, the Government keeps on stirring up the path of policy reform from time to time, even when it is pumping huge amounts of money into poverty alleviation schemes, but without proper oversight (and hence spending more than it should normally do).
The market has moved up a bit, to almost 16K, and there are 2 contradictory advices coming in; one is that there are no fundamental reasons for the market to rise, and the other mentions that overall economy is looking better, realty is improving, production seems to be on an upward jump.
From my side, the mantra remains to be cautious, and look for opportunities. I have invested in the following for the past few weeks, and would be investing more from time to time:
KLG System
HCC
JMC Projects
Bharti Airtel
Cairns
Ashhiana Housing
DLF (this and Unitech are dependent on housing market looking up)
Unitech
GRAUER & WEIL
Nirlon
Satyam Computers (riskier than the others)
Supreme Industries

Labels: Economy, Equity, India, Indian, Recession, Shares, Stock, Tips

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What does a deficit mean ? There are many terms such as fiscal deficit, monetary deficit, revenue deficit, but the differences between are them are relevant for people involved in the field of economics. For the normal person on the street, a deficit means that you are spending more than you earn. A normal person cannot do this without getting into serious money problems, but a Government can (and in almost every case the world-over), does do this. How can a Government spend more than it can earn ? A Government does this through means of a deficit, that it either finances by printing more money, or by borrowing funds from the market.
Both cases cause problems for the economy as such, since if the Government prints more money, this essentially means that more money is being put into the system. More money, but the same amount of production means in simple terms - if you wanted something, and many others want the same thing, then the thing you want gets more expensive. In terms of the economy, if more money comes into the system, then things get more expensive and inflation rises.
If the Government borrows more money from the market, that is less money that is available to private companies to get from their market to meet their funds requirement, or if they need loans for capacity repair or expansion. Such reduction in the availability of funds means that loans for companies get more difficult and has an effect on the ability of private sector to rise above these bad economic times.
Why did the Government need so many funds that it was willing to increase the fiscal deficit to a point where it would be pointed out by economists as a risk ? Well, these are bad economic times and it is at these times that Governments the world over are putting more money into the economy to try to get out of these struggling times. In addition, the Government realized that politically, it has benefited through such measures such as the National Rural Employment Scheme, and it wants to make sure that it is pumping money into the rural sector, the agriculture based sector.
Why did the market react negatively to the Budget, and why am I writing about it after so many days ? Well, the market had been expecting some relief measures, or at least token gestures such as the removal of the Securities Transaction Tax. Instead what it got was no new seemingly market or industry oriented measures and no removal of the STT. Instead it got a much higher fiscal deficit and a seeming reversion to populism. And hence the initial bad reaction to the budget.
However, every year, there are more voices gaining ground that industry should stop looking to the budget as an earth-shaking event, instead treating it as a simple Profit and Loss statement of the Government. In addition, the initial depression of the market has subsided as it looks like there are faint signs of revival, and the realization that the budget did not make things worse, and if rural consumers get more income, that is a new market.
What should you do ? Unless, there are some earth shaking events, the long term prospects look good and you should stay invested for the medium to long term in fundamentally safe companies. Avoid risky companies unless you know what you are doing and you know the risk involved.

Labels: Budget, Economy, Equity, Future, Growth, India, Indian, Market, Stock

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So, the bitterly contested election results of the Indian Lok Sabha (Parliamentary elections) are out, and it is the incumbent party, the Congress Party that is the decisive winner. During the course of the campaign and even during the month long multi-stage voting process, it seemed that there was a tight fight between the Congress and the BJP led camps. It was also projected that there would be an incredible fight for support from the smaller parties all over the country. This prospect saw these parties salivating over the prospect, and over the demands they would make from the major parties for this support.
So there was a constant tussle about whether existing partners are viable or not, and some parties made gambles. The Biju Janta Dal gambled that it would come back to power without the support of the BJP, the Congress gambled that it would need to build long-term in Bihar and Uttar Pradesh (and in Bihar, it did not have much of a choice, since Lalu gave the party only 3 seats). The Congress gambled about going with the DMK even though Jayalalitha seemed to be the one riding the victory wagon. However, as the election result day came closer, nervousness gripped the Congress and it talked about changing partners, soliciting the support of the Left, looking to Nitish and Jayalalitha for support, and even trying to get closer to the Samajwadi Party.
The exit polls that started getting published once the stay on them was removed after the 13th (the last phase of election) were again off the mark, since they all projected that the Congress will have a narrow lead over the BJP and would need support from many parties. The BJP of course refused to believe such polls and stood fast in projecting that they will be the victors.
And then came the election results - and they were shocking to everyone. The Congress led poll, the UPA, is almost at the point of having half the seats, while the BJP led alliance, the NDA, is way behind. The Congress gained seats all over the country, with the party looking to reach 200 seats on its own (its best result since it started declining in the 1989 polls); it trounced the BJP in many states that the BJP should count as core constituencies such as Haryana, Rajasthan, Delhi, Uttranchal, and made gains even in states such as Madhya Pradesh and Gujrat. The Congress made real good in states such as Andhra Pradesh, with the partners, the DMK, in Tamil Nadu.
However, the major surprises in this election happened in multiple states; in Uttar Pradesh, the Congress needs to get back its core constituency and it seems that the gamble it took seems to have paid off (it has got 20 seats on its own), in Maharashtra, the MNS seems to have bitten into the seats of the Shiv Sena and the BJP and led the Congress to victory. The biggest surprise has been the Left strongholds of Kerala and West Bengal. Kerala frequently changes between the Congress and the Communist, and in this election, the fight between the different factions of the Communist party propelled the Congress to victory. The biggest surprise seems to have been in West Bengal where the Congress combination with Mamta Banerjee blew away the Communist party in the state where the Communists have held sway since 1977.
What are some of the conclusions from this election:
- Manmohan Singh re-emerges as the Congress Prime Minister with a much stronger support and with less interference from supporting parties
- The BJP leader LK Advani will slowly fade away - he is already 81 years old and unlikely to be the leader in the next election
- Rahul Gandhi and Sonia Gandhi are the unquestioned leaders of the country now - even people such as me who do not believe in dynastic based leadership have to acknowledge that they have led their party to a genuine victory
- Nitish Kumar and Naveen Patnaik are new emblems of victory, with strong shows of performance and low individual corruption levels
- The Left, having been used to a much stronger influence in the last Parliament will be a pale self with questions about the leadership becoming much stronger
- Mayawati has faced a severe setback in her quest for national leadership; the same goes for former influential leaders such as Mulayam Singh Yadav (who suffered after inducting Kalyan Singh), Lalu Prasad Yadav and Ram Vilas Paswan
- Economic policies and world related policies should remain the same and in fact become more clear and without the holding back due to the Left

This is great news, and the hope is that stock markets (and in due course), the overall economy will welcome stability news and more economic reforms. The negative influence of the Left will go away now.

Labels: Boost, Economy, Election, India, Stock

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