Over-hyped Modi-rally Falls From Grace

Photo: Moneycontrol.com

The bloodbath continued in the Dalal Street even today as the BULLS were taken by the horns, and Nifty closed at 8,057.30 down 39.70 points.  The Nifty today though went down to 7997.15 points, on the intra-day basis; but at last the  support came in the 7500-8000 ranges. 

Though the Nifty might move towards 8150 on the intr-day basis tomorrow, but the Nifty is sell on every bounce. The trend remains down in the short, medium and long term. This will perhaps continue unless and until we have an intelligent Prime Minister and a professional Finance Minister. The passing of GST in the Lok Sabha does not carry much meaning, unless and until it gets similar approval in the Upper House of the Parliament. But the GST has it own merits and demerits; and only time will tell how much it will be able to boost the GDP of the Indian economy. 

Meanwhile, though the inflation is below the RBI's own target region, but it is unlikely the Dr.Rajan would lower the interest too soon, because of unstable rupee and slowing of demand. There is already a chorus from India Inc to lower the Repo rate, but at this hour when the equity market is in ICU, it would be too risky to cut interest rate further. The INR is now at 64.240 Vs the USD and is threatening to cross the $70 mark. The bottomline is that Narendra Modi led government has brought India to the brink of disaster and we are in a classic DEFLATION TRAP. 

I had mentioned 100 times earlier, that elbowing top BJP leaders like Dr.M M Murli Monohor Joshi, might have serious consequences on the Indian economy. The point is that those things which requires experience and intelligence, cannot be solved by hard work or labour.