Modi-nomics Trumps Everything - Part 1 ( of 2 )

NSE:NIFTY   Index of the 50 listed India companies
Having enough fun yet?! ;) It's been exciting roller coaster ride so far. We are not gonna dabble into the politics of everything but we will try to understand the things strictly with respect to the market's standpoint.
It is too early to predict the consequences of the two great surprises, 1.) Donald Trump wining the US presidential election and 2.) Sudden ban on Rs             . 500 and Rs             . 1000 notes by Reserve Bank of India ( RBI ). But we can draw the boundaries and figure out the extremes based on current conditions and then put up some guiding check posts to gauge where the pendulum is shifting - from extreme recession to great economic resurrection.
A Case For Better Future
Let's wean everybody off the pipedream first. We don't totally believe this is going to happen in India. Why? well, you know the answer but if you still insist it being spelled out then here it is. Country of corrupt and crook is not going to change in a day or two or even in next 100 years. Things which haven't changed from past thousands of years can't be cleaned in seconds. It is not about the system but it is all about psyche. If people change then everything changes. But to ask for, or dream about people to change, is too much wishful thinking in our humble opinion.
Even though we are not optimistic about the changes, we will be first to cheer and be happy to be proven wrong :)
Market Effect
In this scenario, Indian Rupee with strengthen and market will be all rosy touching new highs. Gold             will go down because there is less ( let's not eradicate it completely ;) ) corruption and black money circulation to end up inflating gold             and real-estate prices.
Interest rates will come sharply down because there is not much inflation .
Land of lawlessness will be considered as the land of stability and more opportunity for hardworking, intelligent people. It will restore the trust of global investors and will help bring in more money. This hypothesis will be checked very quickly If we can sell more Rupee denominated bonds in open market.
But again, it is not the most likely scenario and there is no point in wasting time in day dreaming.

....Continue... Part 2...
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