05/18/09 Baltimore, Maryland History’s in the making this morning, on the other side of the world… check this out:
That’s the biggest one-day gain in the history of the Indian stock exchange. Buyers were so ravenous this morning that the guardians of the exchange had to halt trading — twice. Once the buyers broke the circuit breakers a second time — seconds after trading resumed — regulators shut the whole exchange down for the rest of the day. So what’s gotten into traders in Mumbai?
Or not what… but who?
This guy…
Dr. Manmohan Singh was elected India’s prime minister over the weekend. As finance minister in the early ’90s, he was largely credited for breaking India out of its statist funk and introducing modern capitalist principles (which, for better and for worse, caused the Indian economy to quadruple over the following 20 years). Suffice to say, traders are betting he’ll do it again.
“We don’t want to sound like party poopers,” warn our Indian partners at equitymaster.com, “but the fact remains that the changes that investors and corporate are yearning for will not happen overnight. Although the re-election of the UPA government with Dr. Manmohan Singh at the helm, and most importantly without the baggage of the left parties, does set the ball rolling in the right direction, investors are advised to go overboard at their own peril.
“The problems that India Inc. is facing — like demand slowdown, leveraged balance sheets and a poor exports scenario, to name a few — do not get washed away with the election results. Hence, we urge investors to do a thorough bottom-up analysis and invest only in those stocks that boast strong fundamentals from a long-term perspective.”
Sign Up for The Daily Reckoning e-letter and receive a chapter from the new Financial Reckoning Day... FREE!
We Value Your Privacy.
