The last few days have seen the markets celebrate XMas and welcome the New Year with some gusto; a sense of false belief, hope and promise had seeped into the investors that the bull run may continue well into the New Year! The market had priced in almost all the macro- and micro economic factors but one thing which the market hadn't bet on was political instability!
The assassination of Benazir Bhutto today @ 6:45 p.m. in Pakistan took the world by surprise. The U.S. government had spent a lot of money and time on reconciling the differences between Bhutto and Musharraf! However, some one sitting somewhere else decided to provide a twist in the tail, a twist that Pakistan least wanted at this moment! The emergency had been lifted only a fortnight ago; however, the assassination of Bhutto casts a lengthy shadow on the Presidential elections due to be held early next year.
I'm not a political writer, hence I'll nnot indulge in the cascading effects her assassination will have on the region's political scenario. But one thing for sure, I don't expect the markets to take the loss lightly! Expect a downward move in the market tomorrow; suddenly everything does not look all that rosy! Gold prices may again start moving northwards for investors will flock to gold to hedge their risks!
In early trades, the Dow Jones was down around 1 percent; expect a heavier correction in the Indian markets! I would expect a 500 point downward move or more when markets open on Friday! It'll be a good time to exit the profitable positions; re-enter the market at slightly lower levels!
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