The UPA has won. It just needs either SP or BSP to lend a hand to the HAND. Dr. Singh will be KING again and keep the seat warm for the heir apparent. Now the question shifts to who will handle which portfolio? PC will have to reboot through the Rajya Sabha. Laluji has a strength of TWO so he has no hopes of making it to the cabinet.
What about the markets? Nifty will be on a new Government honeymoon from Monday and will surely scale up to 3950. It faces a technical resistance there (may be the market may not like the new cabinet or the new FM). If this resistance is breached then we can safely assume (FII Gods and world markets willing) to go up to 4250 in this pre-budget rally. By the way, we are in for a fresh budget from the new Government, the February charade was just a vote-on-account. A vote-on-account is just a permission from the outgoing parliament to splurge for three more months.
With fiscal deficit going out of the hands of the government and no new investment forthcoming the new government will have an up hill task of keeping the economy on the growth track. Our banks may not need a stress test but they sure will need some prodding and some loosening of norms for doing their regular job of credit disbursement. Of course they will have to be assured by the new government that the loans they give will not be waived off again and even if they are waived off, they will be compensated fast.
Now you will also see some more woe stories coming from foreign and not so foreign investors about the state of the economy not being conducive for fresh investment. Things like the limits on foreign investment in retail, insurance and MEDIA will be tossed around. These will be bandied around as reasons for the stock markets not performing well.
The MEDIA moguls need a pat on the back with loosening investment norms for all the PR that they have handled splendidly for the first family of India.
This will be the term when Dr. Singh will have to actually demonstrate that the nuke deal will actually fructify into a win-win formula for our country.
If you happen to read my earlier blogs you will notice a sea change in the style of writing. You will find this more blunt and more prophetic (to say the least). That is because, now that I have bungled once on the predictions of the elections results, I have developed a common disease prevalent in the political arena of our country "The Foot in the Mouth disease". Now it doesn't matter if my predictions are right or wrong I was wrong once anyway!