BUSINESS

Futures and options market hazards are alerted to ordinary investors by FM Nirmala Sitharaman

Nirmala Sitharaman, the departing finance minister, cautioned that regular investors’ unchecked expansion in the riskier futures and options market might cause issues for their family finances. She also gave Dalal Street assurances over the stability and majority of the next Modi administration.

 

The minister stated, “I inherently believe that the stock market and its conduct is on its wisdom,” in a talk to business editors here on Tuesday, discounting the recent market volatility and the significant selloff by foreign investors. The market pays great attention to these and acts based on its own judgment. It has its own appraisal of the circumstances, including those pertaining to the world, other stock markets, and other scenarios. However, I can guarantee you and everyone else that investors need not worry at all about the results of the current elections.

“Prime Minister Modi and the BJP will undoubtedly return with strong numbers; instability is not necessary.” The volatility index doesn’t need to change in the manner that it has been doing lately. Since the Modi administration has been delivering stability in taxes and policy—the two essential components on which markets operate—there is absolutely no need for the VIX to vary.

“Of course, I’m not talking about sure as a set in stone certainty unless you have predicted certainty. Human nature dictates that people desire stability and predictability, which is what the BJP has been able to provide.

It is noteworthy that the BJP, and in particular Modi and Home Minister Amit Shah, have not commented on passing the 400-mark after the first round of voting, despite the party going all out in the lead-up to the hustings.

With voter indifference evident in each of the four rounds of the electoral process and an average low voter participation of 3-5%, the markets, particularly foreign investors, were becoming nervous that Modi may get a significantly smaller mandate. FPIs have divested about Rs 18,000 crore worth of stocks this month alone.

“Don’t worry about the poll’s results.”

According to Sitharaman, the market is acting wisely. The market keeps a careful eye on these events and acts based on its own judgment. She gave everyone the reassurance that investors shouldn’t be concerned about the results of the current surveys.

FPIs uneasy about low voter participation

The polls showed voter disinterest in each of the four stages, and as a consequence, the average voter participation was just 3-5%. This caused the markets, particularly foreign investors, to get uneasy that Modi would win a much smaller mandate.

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