It's all bull

As the stock market soared, experts advised caution and said a correction would be natural; a sulking left says it will facilitate Congress's anti-labour reforms

Stock brokers in Bangalore spent most of yesterday handling queries on investment options as news of the market hitting the upper circuit broke.

"Queries have started pouring in," said Balaji Rao, assistant general manager, Karvy Stock Broking Limited, who alone answered 50 calls. "There's a positive change in the market. The overall market ambience has improved, which makes investment in equity more conducive," he said.
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Spurt of inquiries

Karvy, which had a dry run in the last 15 months was in full swing as stock markets opened yesterday.

The firm received over 200 calls in a few hours as the Bombay Stock Exchange opened. The calls continued even after the closure, keeping staff on their toes.

u00a0"About 60-70 per cent of retail clients are sitting on cash and with the market surging, they have started calling us to inquire about the best investment options," said Somashekar C S, assistant vice president (institutional sales), Karvy Stock Broking Limited.u00a0

Overly bullish

The breach, of course, is attributed to the political changes in New Delhi.u00a0

"Market looks at reforms, which would have been difficult with the push-pull factor of Left parties who are reform-averse. UPA emerging victorious without the Left parties' support has buoyed investors, punters and FIIs, resulting in an unprecedented upward freeze," added Balaji Rao.

And Bangaloreans responded but not before a careful study of market trends.u00a0

u00a0"I recently sold my shares, which would have fetched me a fair amount now. Yes, I willu00a0 certainly trade now as the change in the stock market is promising. But I will only invest after the government has been formed at the Centre and after studying the trends," said M R Nandeesh, manager, Garuda Group.

Is it a healthy spike?

Though the overall market ambience has improved, a correction phase cannot be ruled out, say experts.u00a0u00a0u00a0u00a0

u00a0"The route from 14,000 points to the next level looks very positive though the word of caution should be taken seriously. One can expect a correction, which is quite natural, but we may not necessarily see a crash like last year," added Balaji Rao.

With the Left parties out of the government, the market is expected to trade up to 16,000 points by the time the budget is presented by early July.

Left denial

The Left parties deny the charge of being 'reform-averse'.

u00a0"This is a negative change that only facilitates Congress' anti-labour reforms. And stock markets are only facilitating UPA's moves. However, we will continue to fight against such reforms. Earlier, we did it inside the parliament, now we will do it outside," said G N Nagraj, CPI (M) secretariat member.

Tips to investors
>>Opting mid and small cap space may be a good choice besides large-cap stocks.
>>Those who can invest for a longer period can look for mid- and small-cap stocks but should continue to have at least 40 to 50 per cent of large-cap stocks, which are a safer bet.
>>Consult experts before investing.

India shining
The future looks bright for these sectors:
>>Infrastructure
>>Banking
>>Retail
>>PF and Insurance
>>Telecom
>>Disinvestments in PSUs