The next government is likely to be a coalition. But that will leave the market relatively sanguine.
That’s the word from veteran market Shankar Sharma. An absolute majority for any one party in next year’s general elections seems “doubtful”, Sharma told BloombergQuint in an interview. “The data does not support it.” If indeed a coalition government comes to power in 2019, it would not be “a determinant of what happens with the stock market,” the chief global strategist of First Global said.
I pay no attention to politics in determining where the market will go. I don’t think the market gets driven 6-12 months before elections.Shankar Sharma, Chief Global Strategist, First Global
Sharma is one of the few veteran stock market investors who openly backs the Congress party. While maintaining that he’s “apolitical”, he cites data to back his preference. India grew at a compounded annual growth rate of 7.6 percent in the “troubled years”, between 2008 and 2014, he pointed out. That’s the period when the Congress-led United Progressive Alliance was in power.
The data for the UPA government from 2004-2014 is absolutely stunning and staggering in terms on what they managed to achieve.Shankar Sharma, Chief Global Strategist, First Global
The last Congress-led government was widely criticised for so-called “policy paralysis” and was accused of involvement in a number of corruption cases. “I don’t buy the term policy paralysis,” Sharma said, adding that the government of the day was cornered and not allowed to function.
It was an engineered paralysis. It worked, and the government was voted out.Shankar Sharma, Chief Global Strategist, First Global
Watch the full interview here.