Investors are less scared of AAP and more hopeful about GDP. Two weeks ago, Aam Aadmi Party had marketmen worried. But a clutch of economic data pointing to the possibility of revival and opinion polls indicating AAP's limited national impact have made investors optimistic again.
The Sensex has scaled all-time highs in last two days, and gained 197 points since January 1 despite meagre foreign fund flows.
The bet on AAP being a bit player in national polls is being fed by good cheer from a number of policy fronts. Rate hikes by RBI are over, markets believe, and rate cuts may happen in April-May. The Centre's efforts to keep borrowings at the budgeted level of Rs 4.84 lakh crore by selling PSU shares and cutting expenditure are also feeding the good mood.
"The rise in indices over the past few days has to do with corporate earnings, inflation, interest rates and economic data," said Nirmal Jain, chairman of IIFL. "And on the political front, I don't think AAP will have any role to play in the forthcoming general elections as it is restricted to smaller areas."
"Investors appear to be hoping for a 'game-changing' election, betting on (Narendra) Modi-led BJP," Richard Iley, chief Asia economist at BNP Paribas, said in a report on Thursday. Analysts seem unanimously convinced about Arvind Kejriwal's inability to be a gamechanger in these elections.
"AAP may eat up Congress votes in some places, but has a minimal impact on the national-level politics," said Motilal Oswal, chairman of Motilal Oswal Financial Services. In a January 20 report, UBS examined the AAP phenomenon and said there is little evidence of any major impact on BJP's electoral prospects. The report said AAP has made the elections unpredictable, but advised investors to buy into markets as any party or government cannot afford not to take the right steps for the economy.
"This third party appears to have made it quite a bit trickier," Jim O Neil, former chairman of Goldman Sachs AMC, told ET NOW. "But I would imagine when you get closer to the general elections they might not seem so attractive." An election tracker by CNNIBN and CSDS showed BJP sweeping states such as Bihar, Jharkhand, Gujarat and Madhya Pradesh, and doing well in Maharashtra, Rajasthan and Uttar Pradesh. The polling showed AAP's impact to be negligible in much of central, western and southern India.
"AAP will not be able to stop BJP's juggernaut," said Ramesh Damani, a leading BSE stock broker. "Markets are looking ahead and we are already in the bull phase. AAP will definitely impact BJP's vote share, but there is a sense that they may not be able to destroy Modi's calculations."
Modi's appointment as BJP's PM candidate in September last year spurred a stock market rally that continued well into December.
Investors appeared to be convinced that BJP will do well in the December state elections and also in the national elections that must be held by May this year. But AAP's performance in Delhi assembly elections was interpreted by some analysts as a possible harbinger to a badly fractured mandate, with AAP taking seats and votes away from BJP.
The Sensex has scaled all-time highs in last two days, and gained 197 points since January 1 despite meagre foreign fund flows.
The bet on AAP being a bit player in national polls is being fed by good cheer from a number of policy fronts. Rate hikes by RBI are over, markets believe, and rate cuts may happen in April-May. The Centre's efforts to keep borrowings at the budgeted level of Rs 4.84 lakh crore by selling PSU shares and cutting expenditure are also feeding the good mood.
"The rise in indices over the past few days has to do with corporate earnings, inflation, interest rates and economic data," said Nirmal Jain, chairman of IIFL. "And on the political front, I don't think AAP will have any role to play in the forthcoming general elections as it is restricted to smaller areas."
"Investors appear to be hoping for a 'game-changing' election, betting on (Narendra) Modi-led BJP," Richard Iley, chief Asia economist at BNP Paribas, said in a report on Thursday. Analysts seem unanimously convinced about Arvind Kejriwal's inability to be a gamechanger in these elections.
"AAP may eat up Congress votes in some places, but has a minimal impact on the national-level politics," said Motilal Oswal, chairman of Motilal Oswal Financial Services. In a January 20 report, UBS examined the AAP phenomenon and said there is little evidence of any major impact on BJP's electoral prospects. The report said AAP has made the elections unpredictable, but advised investors to buy into markets as any party or government cannot afford not to take the right steps for the economy.
"This third party appears to have made it quite a bit trickier," Jim O Neil, former chairman of Goldman Sachs AMC, told ET NOW. "But I would imagine when you get closer to the general elections they might not seem so attractive." An election tracker by CNNIBN and CSDS showed BJP sweeping states such as Bihar, Jharkhand, Gujarat and Madhya Pradesh, and doing well in Maharashtra, Rajasthan and Uttar Pradesh. The polling showed AAP's impact to be negligible in much of central, western and southern India.
"AAP will not be able to stop BJP's juggernaut," said Ramesh Damani, a leading BSE stock broker. "Markets are looking ahead and we are already in the bull phase. AAP will definitely impact BJP's vote share, but there is a sense that they may not be able to destroy Modi's calculations."
Modi's appointment as BJP's PM candidate in September last year spurred a stock market rally that continued well into December.
Investors appeared to be convinced that BJP will do well in the December state elections and also in the national elections that must be held by May this year. But AAP's performance in Delhi assembly elections was interpreted by some analysts as a possible harbinger to a badly fractured mandate, with AAP taking seats and votes away from BJP.