<b>Devangshu Datta: </b>Political risk tempered by bullishness

Assembly poll results will indicate if BJP will weaken or become stronger

Investors sometimes downgrade economies on the basis of “political risk”. That is generally associated with Third World dictatorships, where coups or civil wars can lead to chaos. Political risk is now being alluded to by investors fleeing the US bond market. Some institutions are also considering pruning exposures to France and Holland. Political risk is also a factor in India with its string of assembly elections.

While the US stock market has rallied to new highs, the bond market has looked distinctly nervous, with overseas investors pulling out as the Trump Administration stumbles around.  There is a chance that