Mkts likely to see 4-5% gap-up opening

It is good news for the market and almost certainly there will be a gap up opening tomorrow, maybe 4-5% kind of a gap up. The only thing is that the market knew this was coming, it went in with its eyes open which is why we had that 11% Nifty rally over the last 5 days and some of it or a large part of it is already in the price. A lot of short covering has happened, so the bears knew this was coming and they also have covered up some of their positions. So after you get the initial gap-up, the first half of the day or the next day or two may be good. Thereafter  you will see some profit taking inevitably happening and the markets may shed some of its recent gains.  

The bigger question is whether in the medium-term, the next few weeks and months what has happened tonight in New Delhi has sown the germs of a more durable rally in the market? If the Prime Minister goes ahead and initiates some reform steps which the market hopes it will then I think we might have some sentimental rub off and the markets may inch higher. But it will also depend on other extraneous factors like price of crude and global equity markets.

To cut long story short, tomorrow morning there is a rally and maybe after the initial rally we can see some profit taking. Medium-term still depends on the kind of news flow on the reforms path that we hear from Dr Manmohan Singh.