Market looks for a signal

The stock market remains flat. It awaits clarity on the direction of economic reforms from the new government, which has inherited a healthy economy, growing at around 8% and with bloating foreign currency reserves ($115 billion). But it has ended up with strange bedfellows, which keep pulling it in various directions.
It may be a good idea to consider a law under which the majority party has to bear a part of the subsidy burden from of its party funds.That would balance indiscretionary use of public funds.
Consider the damage to oil PSUs by holding on to petro prices when crude prices are rising. Profits of IOC fell 16% to Rs 1,850 crore. The government has decided not to divest stake in the profitable HPCL and BPCL. Whichever government does decide to sell, it will fetch a valuation diluted by the fall in profits.
The long awaited news is the TCS IPO filing. The impact was a fall in IT stocks, like Infosys and Wipro, now that another choice will soon be available.
NHPC showed a 22% per cent growth in profits to Rs 620 crore on a 7% increase in turnover to Rs 1,410 crore. Ashok Leyland declared a 61% jump in profits on a 27% rise in sales. A study by The Economic Times of 1,969 firms showed 210 of them had turned around, becoming profitable after a year of losses. Their aggregate profit was Rs 3,650 crore, against a loss of Rs 1,650 crore. Public sector banks performed brilliantly, with several doubling profits. Software service and exports have grown 30.5% to $12.5 billion. The farm sector is set to benefit from infrastructure spend.
All elements are in place for a revival of investor interest, barring one. And that is clarity on direction and pace of reforms. Mr Singh, you once rescued India from an economic morass caused by foolish policies. Don''t drive it back in again.