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Ridham Desai, the MD, Morgan Stanley India, said that the move to allow global investors in mutual funds is very positive. Another positive factor is the infra spending of 27% more. He expects a positive impact of 50-60 bps on earnings. He expects the markets, Sensex and Nifty, to perk up by a furthur 20%.


"I think the budget was okay, there was nothing bad in the budget. I guess market expectations were a little bit on the lower side. So, I think there is a sigh of relief that there is nothing untoward in the budget.

I think he has done a decent balancing act. There were a lot of constituencies to serve. I think there is a bit of skepticism on the numbers, maybe the revenue side is a tad aggressive and on the subsidy side, he has been maybe a little bit too aggressive on the downside. So, maybe eventually he is going to have a tough fight on his hand to meet these numbers.

But apart from that, I think there were a few positive takeaways, which the market I don’t think has immediately paid attention to, I don’t see a lot of investors have paid attention to it. This whole thing about the Nandan Nilekani Committee is a very positive signal. The move to allow foreign individuals to invest in domestic mutual funds is positive.

I think there is a fair bit of infrastructure. If we look at the split of expenditure, he is budgeting for a 27% increase in infrastructure spending. Now, in a budget where overall spending is rising 3.5%, that is a huge skew towards a particular sector in terms of spending. Ofcourse the skeptics will come back and say but he didn’t do it last year, he had spending increased last year and he underdelivered. But the fact is that he has chosen to discriminate all his spending basket. He has picked out infrastructure for his spending, which I think is the key area where we need the spending.

So, he is doing the right things. Now, it is all down to execution. It is easy to stand up now and say, “They will not execute and be skeptical about it.” I think the other way of looking at it, which is my way of looking at it, is we will see we will wait and watch and give them the benefit of doubt right now and come back late to check whether the executions have happened or not. So, I am reasonably okay with the budget. I think it is pretty okay for the market."

Silver Price(USD) Silver Price

"The market interest rates, to me, at various levels look like we are almost done. The only caveat here is what happens to oil. In 2008, when oil went up, we responded with the very sharp increase in rates. If oil does go up to USD 130-140 per barrel then that may have some implication on short-term rates. Otherwise, I think deposit rates we are mostly done, lending rates may go up a little bit. The RBI definitely needs to move a little bit maybe another 75-100 bps over the next nine-twelve months, but not a lot left on short rates. I think we are dealing with almost peak rates across various market interest rates."

We had said in our columns that India is running a good time, astrologically. Jupiter in the 9th and Saturn in the 3rd are both favourable. Period wise, India is running Sun Dasa/ Rahu Bhukthi. The ICTT Terminal at Vallarpadam became operational  during this phase. Vibrant Gujarat mopped up 450 billion during this time. The Sensex is going up, thanks to the govt allowing global investors to invest in the mutual funds sector. Bullish news will come in during favourable times and during unfavourable times, bearish news ! The markets normally go down after budgets. But this time, due to the pragmatism of the FM, it is otherwise !

Experts consider that the Stock Market and Oil Market are retrograding back to the state of 2008, when acute Recession was observed.

Oil had peaked to $140 per barrel then. Then the main causative factor was the economic crises in almost all developed countries.

Today the main cause is the unrest in all oil producting countries. Oil price may go to the Resistance Level of $140 !

Meanwhile, Obama has opined that increased demand for cooking gas and oil from the BRIC nations ( Brazil, India, China and Russia ) is responsible for the oil price hike. These economies are fast, developing economies and they need more oil and gas. Obama was addressing the media about the oil price rise.

Gold Price(USD) Gold Price

If in 2008, oil price hike was due to recession in many countries, today the cause is that some countries ( BRIC nations ) are developing fast !

At the moment, India is on a growth curve with exports expected at $ 230 billion and imports at $ 317 b. A deficit of 87 b ! Indian exports crossed the 200 b mark in the first eleven months this fiscal. Feb exports was over $ 20 b.

The growth of the export sector, therefore, will be 50%, as India exported around $ 160 b last year.

India is planning to increase exports to the tune of $ 450 b in three years. But then what will be the figure of imports ?

So a robust 8.6 % growth is forecast for the Indian economy. Astrologically, India is under the favourable Jupiterian transit till May 6th and the benign Saturnine transit till Nov 15. After these dates are over, India will be facing adversity. Jove in the 10th and Saturn in the 4th give scope for alarm and despondency. We do not know how the oil price rise will affect India. As India imports 70% of its oil requirement, she may be adversely affected by the oil price hike !