Obama's re election and Indian Stock Markets

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Finally Barack Obama has won the race. People who are betting heavily on Romney are disappointed with this result. The big debate that who is good for Indian stock markets is still on. Indian stock markets reaction is not aggressive to the results. After the results our markets touched an intra day high of 5776 on nifty and settled at 5760, a 35 point high from previous day close. Dow Futures are also trading mixed. So what does that mean?

The first term of obama has seen significant improvement in Indo American relations. Along with Obama's visit to India there were many ministerial level meetings held between both countries. US's support to India's permanent seat in UN security counsel, Indo American Nuclear deal and FDI in retail are the major policy developments of this period. The expected curbs on outsourcing were not very effective. So in layman's terms Obama is not dangerous to India. Then why our markets are not reacting aggressively?

The Markets are under severe pressure from European crisis and global slowdown. The European debt crisis has shown significant impact on sovereign debt quality of many nations. This phenomena has lead to the decrease in purchase power of the global economy. Slowing demand is leading to job cuts and job cuts are causing decrease in spending. Obama's policies in past 4 years could not show any improvement in these conditions. The only reason why the market is still not falling is the hope of continual policies.

Indian markets are not going to lose further. As Mr. Singh is firm on his decision to take reforms to next level. The weak opposition shows no threat to the govt till 2014. FIIs who were disappointed by Romney's defeat may look out of USA to invest. Despite the fall in GDP and global factors India is the best market to invest based on valuations.


Indian Markets after a midterm consolidation took support at 5583 and bounced back. Bollinger analysis suggests a strong support at 5630. Short term players can enter long with a strict stop loss at 5630 in nifty spot for a target of 5930, any fall below 5630 this time will take the markets to 5420 level.

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