Congratulations are in order for Narendra Modi and the BJP for the landslide election win. “Modinomics” as it is being called promises to usher in a new era of business and economic growth for the largest Democracy in the world.
Time will tell if the new pro-business, less government environment will help turn the tide of the Indian economy. Many people are impatient and want to see changes quickly so Modi has his work cut out for him.
As I write this article, the equity markets are responding to the election results. However, the buying pressure is coming in at extremely high prices and Friday’s price action was a bit disturbing.
The reason for the concern is that even though the Nifty and Sensex closed much higher than their previous closes, they closed well away from the day’s highs. This indicates that there was a lot of profit taking and not long term investment.
It is being reported that foreign investors have poured about 160 crore into Indian stocks and bond investments over the last six months and now own about 22 percent of listed stocks.
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