These are the "Acche Din" (Good Days) - Enjoy.

GST has been cleared,
and good rains have brought relief.
A ton of  "black money" turned to white,
while RBI has cut the Repo rate,
As India signed the "Paris Pact",
fiercely to the neighbour, it also "gave it back".
Is it time for us to cheer?
Are the "Good Days" of PM Modi here?
Does the BSE Sensex need more
for it to soar?

Theoretically, of course, the BSE Sensex should be sitting above 30K. When the fundamentals were missing it soared and when they seem to be around the corner, it's doubting itself.  Well, I don't know how many would agree, as, over time,  this Country seems to have been conditioned in the art of being unhappy, and maybe its markets too. My own take it that the market will sit between 27K and 28K before the end of the year, and stay there until budget time.

Yes, we do have a terrible situation globally:

The US election battle gets murkier,
the Fed is keeping the world markets on edge.
Terror shows no signs of abating,
nor signs of refugees receding.
Each day sees new economic or political disturbance,
no continent or nation spared.

Practically we are still coupled to the present hiccuping global market. The situation at home may look very positive, but is it really so?

GST may have been cleared, but implementation still a hurdle as getting a consensus between the divided states run by varying political interests is a Herculean task. With the high rates being spoken of, the advantages of a unified regime may just be lost. Even so, there is an argument floating that the govt. may have no choice but to go with high rates if Corporate and Personal Income Taxes need to be brought down. In a country like India where only 3% of the population pays tax, an indirect tax regime - as regressive it may sound, maybe the only solution going forward. It's a 'wait and watch' until budget next year and the market sentiments reflect it too.

The rains may have been plentiful after three years of drought, in fact, too plentiful and too unseasonal, causing floods in many parts as well as ruining much of the winter crop. Food inflation does not look defeated just yet, and the markets are absorbing that fact.

The Government's "Income Declaration Scheme"  (IDS) brought disclosure of some 65,250 crore Rupees (US$ 10 billion) of unaccounted income, yielding some US$ 4.5 billion in taxes. The money multiplier effect of  injected ing this quantum of cash into the formal economy is many-fold, but the murmur is that it is just a fraction of the US$ 180 billion of unaccounted wealth tucked away in tax havens. Even so, the extraordinary tax collection will certainly help in completing several infrastructure projects or maybe hide the pain on the exchequer's fiscal deficit number on account of the pay hikes and PSU losses. The market is not fully convinced that the amount collected will do much for the economy or change the way the economy functions.

The new Governor of the Reserve Bank of India, Mr Urjit Patel, a follower of "Rajanomics" principles, departed from the policy of his predecessor and mentor by announcing a REPO rate cut of 25 basis points citing various economic indicators in support for his move. While the industry celebrated the move and labelled it progressive economics, there were murmurs that Rajan's exit and Patel's appointment were clearly linked to politics governing the Governor's decisions. One can say what one wants, but the biggest beneficiary would be the home and white goods market that now relies on debt for the acquisition of the same. It certainly gives a big kick for the Sensex to rise. But then, US can play spoilsport with elections and a rate hike there.

With the ratification of the "Paris Climate Pact", India was feted by the International community as a globally responsible nation, brightening its image as a world leader. Then again, there are many who are surprised that it did it ahead of being admitted as a full member of the NSG, thereby not only diluting its bargaining power for admission but also making it impossible for achieving the targets stipulated in the absence of access to more nuclear energy. For a nation that contributes 4.1% of global emissions, obtaining cheap and clean power as well as getting polluting industries to toe in line will be an expensive exercise, one that will put a drag on the markets in the short term.

Finally, the Indian Armed forces, tired of being badmouthed by media and bullied by terrorists across the border decided to show what it is made up of. A surprise well coordinated retaliatory surgical strike on terror camps across the Line of Control (LOC) became a reason for national bravado. However, falling prey to voices from across the border, voices within began demanding sensitive proof  of same from the Government and the forces.Whatever may be the political bickering internally and externally, the threat of the situation going out of hand would keep the markets on tenterhooks.

In another few days, the Q2 results will be tabled and I see them offering "hope with a chance of recovery" rather than something solid for the market to break the 30K barrier.

Unless there is some other fuzzy logic which may play out, the markets at least will play a range bound game.
Let's accept it, these are the good days because bad days could be worse. On a planet that is offering nothing but chaos, hope is the better option. We do have the world's attention on us, let's enjoy it and not do something silly to blow it.