Jaitley is no superman: A short-term fall in Sensex post budget 2014 can’t be ruled out

The stock markets have been having a ball for some months now, ever since they smelt a change in government, and especially after the installation of the Narendra Modi government with a clear BJP majority. The Bombay Stock Exchange Sensex is hovering below 26000 and an Economic Times roundtable of market mavens predicts that the index could head for 31,000 by March 2015 – that is, an upside of another 20 percent from here.

Is this going to happen? Or are the markets over-optimistic on what Arun Jaitley can deliver in his very first budget scheduled for 10 July?

There are two contradictory forces at work right now, and the chances are the markets will probably fall after the budget before beginning a climb again in the run-up to the next budget in February 2015.

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