There is steam in this rally, but euphoria could be misplaced, experts said on Monday after the Sensex sizzled in its biggest single-day rally that led to trading being halted.
While the jump was clearly a vote of confidence to the new UPA government voted to power in the elections, questions hung in the air on how long the rally will last and how far it can be reasonably expected to go.
Motilal Oswal, Chairman and Managing Director of Motilal Oswal Securities Ltd was guarded in his outlook. “Every important event has impact on the market, but I would say that markets over reacted. Though we will not see a serious fall, from Tuesday onwards the markets will be back on its usual track,” Oswal told Hindustan Times.
“It (Monday’s surge) is euphoria as it is not based on the fundamental earnings and so its sustainability will be questioned,” said Amitabh Chakraborty, president, equity, at Religare Enterprises.
Vikram Kotak, chief investment officer at Birla Sunlife Mutual Fund, saw a long bull run ahead: “Eyes would be on government formation, key portfolios and government’s move on reforms,” he said.