Will the policy action finally begin?
The policy window, a period when parliament is not in session starts now. If the government is serious about reforms, it should be moving now. And, fast. What can be done to remove the stigma of being an underachiever? The expectations are actually not centered on performance. It is enough if the right signals are sent. These signals are required to show requisite will. We need to tackle the ballooning subsidies, open up FDI in retail and aviation, remove retrograde and retrospective tax laws and to revive public confidence. The grapevine has been abuzz that the government is set together cracking. We should know by the end of the next week.
Every results season begins when the preceding quarter ends. The best performing companies come out first to report their numbers. The laggards wait for the last week. This six week season runs from July 1 to August 15. Most of the best results are out by the end of the fourth week. Traders buy stocks in anticipation of results and unwind after the news is out. Stocks tend to settle down a few weeks after their results are out. Prices stabilize and volatility settles. Usually, this phase is an excellent investment window as investors can assess performance carefully and make informed decisions. The coming weeks will see this window open.