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Election Results' impact on Stock Markets

The current Election results will have a major impact on Indian Stock Markets. What has changed from the previous set-up? The Left is out of the Government and UPA is emerging as the majority coalition without the regional parties. These two points are major positives for the markets.

As always, it is sentiments which rules anything. The sentiments are buoyant to boost the moods all over. Also FIIs, assured now by the political stability at the Center, will be interested more in investing in India.

At this juncture markets having already run-up 4k points from 8k to 12K, what should a retail investor do now?

As UPA coming to power, we hope to see privatization taking off in a big way, the financial sector reforms, especially for the banking and insurance sectors. So these sectors and stocks in these sectors are a good place to invest into. Many stocks in the Stockwatch section belong to Banking sectors. Also major PSU stocks like HPCL, BPCL, IOC too can be looked into.

These positives doesn't mean, one should jump into markets on Monday and buy, because on Monday, markets are expected to open up in a big way. There is no point in investing when markets are up 700/800 points up. Also the Global negatives are still in place and nothing fundamentally has changed.

Traders can ride the momentum with strict stop loss in place. But as far as investors are concerned , any sharp correction in markets can be used to buy fundamentally good stocks. Again the old rule stays fit - Buy low, Sell high ! Identify yourselves whether you are investor or short term trader, before committing funds now.

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