NEW YORK (TheStreet) -- When U.S. markets are closed, China often takes center stage. But this week, traders turned to India's economic prospects.
India's stock market dominated the trending bar on StockTwits.com. Specifically, traders watched the performance of Direxion Daily India Bull (INDL), an ETF that seeks to return 300% of the Indus India Index. The ETF rose nearly 4.6% Monday as India inaugurated a new prime minister widely viewed as "pro-business."
$INDL sensex doing well . nw highs for indl? mojojojo1 (@jitendermahajan) May. 26 at 05:01 PM
Narendra Modi, India's 15th prime minister, ran on a platform of more economic growth, unhindered by government red tape or corruption. Modi delivered on such promises as the head of Gujarat, a northwestern state in India known as the "jewel of the west," which holds a biennial summit to attract foreign investment. And his promise of less stalling on business decisions due to government bickering carries weight since his political group, the Bharatiya Janata Party, will control a majority in the country's lower house of parliament.
In some ways, Modi resembles U.S. President Barack Obama. He ran a technology-driven campaign aimed at appealing to India's middle class youth. He also worked as a community organizer before becoming chief minister of Gujarat, a position he held for 13 years.
Many investors say the similarities end there. And they argue that Modi, unlike Obama, will prove to be a Ronald Reagan-esque leader that reins in government influence on business, thereby fostering growth.
However, some investors cautioned against buying into India's election hype. Even if Modi's government is able to speed foreign investment and economic growth -- while curbing crippling price inflation -- it will take time for necessary reforms to take effect. And Modi, a Hindu nationalist, still must deal with violence between Hindus and Muslims, which broke out in Gujarat on the eve of his inauguration and also in deadly riots in 2002 while he led the region.
? BDF_NYC (@BDF_NYC) May. 16 at 11:17 PM
@hukilow I am going to buy puts. Modi is all talk. He has good pr team and thats all.
? Katrina Kaif (@iKatrinaKaif) May. 24 at 04:34 PM
However, despite the occasional calls for bearish options positions, few recommended outright shorting the index -- or buying into Direxion's India Bear ETF (INDZ). The tide of foreign investment into the country based on hopes for the new administration is too strong, most investors argued.
At the time of publication the author held no positions in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.