Despite many positive developments, according to Jeffer’s latest India strategy report, the Indian equity market has not yet seen an important rally. The report highlights several reliefs, including Pro-Goth commentary from the Reserve Bank of India (RBI), no negative effects from the new income tax bill, broadly in-line income results and strong mutual fund inflows. However, these factor are not enough to run the market rally.
The RBI recently reduced the repo rate by 25 basis points and postponed the implementation of the liquidity coverage ratio (LCR) and tight rules on the project finance. The move is expected to save Rs 700 crore in tightening liquidity and reduce immediate liquidity concerns, indicating a change in the direction of prioritizing development.
The aim of the new Income Tax Code introduced by Finance Minister Nirmala Citraman in Parliament is to simplify the language, eliminate fruitless segments and reduce compliance burden on taxpayers. The bill maintains current tax rates, which is obtained positively by markets, especially concerns about possible increase in capital gains taxes.
(Tagstotranslate) Sensex (T) Nifty 50 (T) Market Outlook
