Will elections be an important event?

With the Assembly elections knocking the doors, the common talk of the traders is "how one person's PM candidature is going to affect the market". One such event we had seen this year is the incumbency of RBI governor. I heard a lot of traders stating "merely a change of RBI governor can not change the outlook of the market and the bulls will loose their grip soon." How far the markets will sustain the current level that's the matter of time. But, when we look around, we see a lot of people quitting the market. Many brokers reduced their staff and shrunk their presence. Many sub-brokers surrendered their registerations. Mutual Funds are net seller through out the year because of the redumption pressure. On the other side,  FIIs remained net buyers in Nifty 50 as well as CNX 100 shares. 

Current valuation of market

Source of data: http://www.nseindia.com/products/content/equities/indices/historical_pepb.htm

On global fronts, this year, our currency depreciated worst in last 20 years. Which provided a great opportunity to the Foreigners to buy many quality shares at throw away prices. The US market, which has been in One-sided bull run since 2009 may correct soon. The US Dollar Index has been with-holding the mark of 80, because of weakening Japanese Yen. 

Though the Nifty is at 6000, the valuations are still at undervalue levels. Finally, to conclude, I would say that this is an undervalue market where the quality holdings are in hands of the FIIs and an Average trader has become used to with short-sellings and for the investor equity is the last option after Real-estate and Gold.

So, the market is just in a search of a reason where rampant, sharp and swift move.

Sheetalpuri Goswami