Tuesday, August 9, 2022

Investors say Nifty will open strong with FM’s booster shot

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New Delhi: Union Finance Minister Nirmala Sitharaman’s booster shot for the limping economy has received a thumbs up from India Inc and investors alike as it addressed a number of concerns flagged by them. Investors sounded an upbeat note as they opined that the Nifty50 is likely to see a strong opening when it resumes trade on Monday. The index closed with losses of about 2 percent for the week ended August 23.

What did D-street say?

One of the biggest announcements made on Friday that calmed investor nerves is the rollback of higher surcharge on foreign portfolio investors (FPIs) and domestic investors. FIIs had pulled out nearly Rs 30,000 crore from the cash segment of India equity markets since July.

“D-Street will welcome measure announced by the Finance Minister and we could see a bounce of about 100-points on the Nifty when the market resumes trading on Monday,” AK Prabhakar, the head of research at IDBI Capital, said.

“Post Budget, the correction was one-sided. We made a low above 10600 on Friday. But, going forward, the overall rally should be strong, and we could even touch fresh highs by December 2019 if earnings also show recovery,” he added.
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‘Investor expectations addressed’

“The finance minister has announced a slew of measures that will go a long way in addressing the expectations of investors and equally importantly, improving consumer confidence. We expect the market to gap up on Monday morning, and the process of restoration of growth via reforms is underway,” Sunil Sharma, Chief Investment Officer at Sanctum Wealth Management, said.

“These measures will go a long way in reassuring investors of a pro-growth agenda. In large part, financial markets sold off on a disappointing budget. Investors will draw comfort from the measures announced today and the process for growth recovery has started,” he said.

‘A great relief’

“The stock markets have been volatile ever since the uncertainty with regard to higher tax on FPIs emerged since the announcement of super-rich surcharge in the Union Budget. The announcement to remove the surcharge comes as a great relief for investors and we do hope that the markets will respond positively. Additionally, the decision of the banks to pass on rate cuts through MCLR to benefit all borrowers and to introduce repo rate related loan products should help lower the cost of capital, which has been one of the major asks of FICCI. The move to create an Internal Advisory Committee in banks and by vesting greater powers with the Chief Vigilance Officer within banks should help remove fears amongst Public Sector bankers in taking credit decisions,” added FICCI president Sandip Somany.

US hails India’s mini-budget

The US corporate world also welcomed the measures announced by the Finance Minister, saying the comprehensive set of proposed reforms will provide needed stimulus for the economy and strengthen India’s position as a global investment destination. “We also see new measures to simplify GST particularly the commitment to ensure GST refunds within 60 days as a critical step to give both US and Indian companies confidence in the predictability of India’s tax system,” US India Business Council president Nisha Desai Biswal said.

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