We Are Heading for Mother of All Bull Runs: Rakesh Jhunjhunwala
Indian stocks markets have hit record highs since Narendra Modi won a landslide mandate. The stock market rally began even before that. Since Mr Modi was announced as BJP's prime ministerial candidate in mid-September, the Nifty has rallied nearly 24 per cent.
Billionaire investor Rakesh Jhunjhunwala attributed a large part of the rally to the "Modi effect". There are also other factors like "the feeling that Indian economy has bottomed out", he told NDTV. (Watch Video)
Mr Jhunjhunwala, who is also hailed as "India's Warren Buffett", expects the rally in Indian stock markets that started in August when Nifty was at 5,500 "to be the beginning of the mother of all bull runs that India has seen". It could last for 10-20 years markets, he says. Nifty ended 11 points higher at 7,275.50 on Tuesday.
"We are underestimating the kind of change Mr Modi will bring into this country and the effect of that change on equity markets," he says.
Mr Jhunjhunwala says the biggest factor for the bull run is the hope that "Mr Modi will enable policies that will accentuate growth and increase optimism".
He also attributed some other factors to fuel the bull run: "Global interest rates are low and interest rates have peaked in India."
Narendra Modi would be sworn in on May 26 and markets are now in anticipation of who would be named in charge of the crucial finance ministry. HDFC chief Deepak Parekh, BJP leaders Arun Jaitley and Arun Shourie are being seen as frontrunners to the job. Asked about his choice, Mr Jhunjhunwala says he has no "preferences for who will be finance minister."
Mr Jhunjhunwala however wanted to keep investors' expectations tempered. "Let us not be in a hurry. The government can't be like the stock market. We need good governance and righteous economic policies."