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Fate of Indian equity market in the hands of upcoming Budget Session

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Mumbai: The upcoming week in the Indian equity market will witness Parliamentary proceedings, US macro-economic data and trends in crude oil prices, leading the fate of markets’ next moves.

Even the budgetary announcements, rupee’s trajectory and the interest of foreign investors will give vital cues to where the market is heading.

“Markets would continue to be lacklustre and news driven. Forthcoming budget expectations and corporate earnings would be watched closely,” predicted Devendra Nevgi, chief executive of ZyFin Advisors.

Pankaj Sharma, head of equities for Equirus Securities, elaborated that investors will be guided and influenced by developments surrounding the union budget.

“The market would read the important cues on the budget from key decision makers, both politicians and senior bureaucrats and react accordingly,” Sharma noted.

“One good thing in all this market mayhem over last 6-7 weeks which has been led by global factors is that the usual buzz on the budget has largely been missing.”

Vaibhav Agarwal, vice president and research head at Angel Broking, pointed out that investors have not priced in the possibility of key reforms being passed in the parliament session.

“Any progress towards implementation of important reforms such as the GST (goods and services tax) would be a key trigger for the markets,” Agarwal told reporters.

Market participants expect the central government to increase expenditure, announce tax concessions and pave the way to reduce the NPAs levels of the banking sector.

“Sentiments are currently down and any positive announcement is surely going to trigger a relief rally in the equity markets. This rally might spill over to the currency markets,” Anindya Banerjee, associate vice president for currency derivatives with Kotak Securities, told reporters.

According to Banerjee, normal parliamentary proceedings, after the recent political turmoil will be keenly followed by market participants. The parliament’s budget session will commence on Tuesday.

“Any signs of a washout in the initial few days will dampen sentiments and dent the rupee,” Banerjee stated.

He explained that an “over-valued rupee” will come under pressure from February 22 onwards as a string of US economic data released till date is expected to keep the dollar well supported.

The rupee had crashed to an all time low at 68.89 to the dollar in the oversees currency markets on Friday and ended the day’s trade at 68.72.

Domestically, the rupee had closed unchanged from its previous close of 68.47 to a greenback on Thursday. The domestic currency markets were closed on Friday.

Besides, the union budget economic survey and railway budget will dictate trend on the bellwether indices informed Gaurav Jain, the director of Hem Securities.

“Indices may seem to remain volatile with a positive bias ahead of the expiry of February series derivative contract, economic survey and reform measures announced in the upcoming railway budget in the week ahead,” Jain said.

In addition, global cues, such as crude oil prices and the trends in foreign funds inflows will be keenly observed.

“Markets will continue to react to global cues with US home sales and GDP data expected next week,” Agarwal added.

Analysts forecast the continuation of the relief rally at the Indian bellwether indices. Short-covering, value buying and positive global cues had swelled the equity markets, during the just-concluded weekly trade.

The barometer 30-scrip sensitive index (S&P Sensex) of the Bombay Stock Exchange (BSE) zoomed by 723.03 points or 3.14 percent to 23,709.15 points during the just concluded week.

Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) rose by 229.8 points or 3.29 percent to 7,210.75 points.

Global indices too rose with the Dow Jones Industrial Average closing the week with gains of 2.6 percent. London’s FTSE rose by 4.2 percent during the week under review. (Rohit Vaid, IANS)

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Filing GST Returns Too Taxing

It has made it mandatory for tax payers to file the income tax return by 31st of July. In case of the delay, the fine of Rs. 5000/- per file is being imposed

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GST
GST is one of the strongest step taken in the direction of Digital Technology.

By Salil Gewali

No doubt the NDA government in the center brought about remarkable changes in the market and the fiscal policy. One of those includes GST with a strong backup of the digital technology. No one would disagree that this will contribute immensely to the nation building and boosting its economy. Many world economists are lauding the India’s move in this direction. Well, for all such dramatic changes our techno-savvy PM Modi’s relentless dedication and innovation is highly praiseworthy.

But, however, there are “murmurs of dissatisfaction” among the middle-class traders these days. The displeasure expressed by the business community is all about the government’s rigid diktat for the GST filing. The administration is apparently putting the hard squeeze on the middle and upper middle class traders and entrepreneurs to file GST “before 20th of each month”. In case of a delay, the penalty of Rs 50/- per day is slapped which is a huge disappointment. How on earth does the government expect each trader to have the computer knowledge? Most of the small traders have not yet touched the desktop. So, they all rush to the nearby tax professionals to do the job. Just imagine how a few tax experts in the town match up to the countless GST payers. Can ten thousands sick patients be treated by one single doctor in a short span of time? This is totally impractical.

GST
The displeasure expressed by the business community is all about the government’s rigid diktat for the GST filing.

Each tax expert has to file the return for the minimum 300 to 800 clients per month and that number is increasing by leaps and bounds. The traders are required to keep the detail account of all sales and purchases throughout the month for which they have to bear a good deal of incidental expenditures. Many erroneous entries are usually made in the filing of GST, but once the file submitted that can’t be revised. Usually, the last two days of the GST filing is a nightmare. Because the site is clogged due to heavy traffic. Does the government want the small traders being harassed and bugged out thus? Mere imposing the hard regulations will never yield the positive result.

There is another shocker of this government. It has made it mandatory for tax payers to file the income tax return by 31st of July. In case of the delay, the fine of Rs. 5000/- per file is being imposed. This is indeed a cruel imposition that might just bruise the confidence of obedient tax payers. Given the literacy rate and very poor “professionalism” in India, such hard decrees by the government only make the citizens more annoyed than happy. Here I intensely doubt if it is the BJP government that wishes so much hardship upon the public. Is it not trusting 1.25 billion Indians, as touted by our astute PM Modi, who all have been standing for him through thick and thin? I think the finance ministry immediately needs some overhauling for the interest of the general public.

Salil Gewali is a well-known writer and author of ‘Great minds on India’. Twitter: @SGewali.