MUMBAI: Speculations over who would be the next finance minister took benchmark indices Sensex and Nifty to their May 23 highs before crashing on announcement of portfolios on Friday. The names that were doing the rounds included Amit Shah, Piyush Goyal, and till the time of swearing in of the council of ministers on Thursday, even Suresh Prabhu and Jayant Sinha.
“Rumour mills were strong on Amit Shah’s name, and that is why when it was not him, the market saw a 600 point fall on the Sensex. Markets, somewhere I think, between Amit Shah and Nirmala Sitaraman, would have preferred Amit Shah,” said Alok Churiwala of Churiwala Securities. The broader view was that Shah, having been a stock broker once, would at least have had an easier understanding of the issues of the broking industry.
Markets may have been a tad disappointed, but not much with the appointment of Sitaraman as finance minister. “Academically she is strong,” said Ajay Kejriwal, president, Choice Broking. With her earlier stint at the commerce and industries, and now holding the same portfolio again along with finance, the market is hoping for action to revive sentiments and investments in the industry.
“From the Cabinet perspective, both Piyush Goyal and Nitin Gadkari are continuing in their old ministries. That means they are doing good work and markets will take them positively,” said Kejriwal.
Share prices opened higher on Friday and the benchmark BSE Sensex climbed close to the May 23 high at 40,122.34, but gave up the gains quickly thereafter to hit a low of 39,374. Nifty too hit a high of 12,039.25 before retracting to 11,829.45. By end of the day, both the indices had recovered from their day’s lows; traders expect that further upward moves would be determined by the liquidity, investment thrust of the new government, and more importantly, the monsoon.
With uncertainty over elections behind, and a new government in place, the equity markets are also looking forward to renewed activity in the primary markets. Over half-a-dozen companies that have lined up share offerings are likely to hit the market, taking advantage of the positive sentiment. Some of them have already started road shows.