Investors at Dalal Street bet in favour of UPA

TAKING STOCK: Analysts feel that if Government loses the vote, markets could correct by seven per cent to eight per cent.

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New Delhi: As the fate of Manmohan Singh Government hangs precariously, investors at Dalal Street are betting in favour of the UPA.

A high pitch political drama being played at the corridors of power in New Delhi and the Prime Minister is to survive the opposition onslaught, he will have to muster the magic figure of 271 votes, a number that the markets are watching closely as well.

The Sensex zoomed over 200 points in Monday's trade, however the question that many people are asking on the Dalal Street is whether UPA’s win would be a magic pill or just a temporary balm for sentiments on the Street.

“We are talking about elections either eight months from today or four months from today. It is not as, if the Government survives the trust vote, you are going to see the Government last for two years. The life is over in 8 months anyway,” says MD, Avent Advisor, KR Bharat.

However, what happens if the Government loses the vote?

Analysts feel that if Government loses the vote, markets could correct by seven per cent to eight per cent. More than the correction, it is the crude realities of rising oil prices coupled with rising inflation and slow down in US economy that is worrying them the most.

“I think the biggest problem will be from crude because even if elections are held early, the markets won't have a problem, except for a few first reactions,” says Helios Capital, Samir Arora.

On the high street of political power, the number game is currently the national obsession. But, for markets reeling under the bear attack, political stability could produce a temporary lull in volatility.