India's equity market is unlikely to fall further on account of the government's measures to revive the economy and foreign fund flows, according to market veteran Basant Maheshwari.
That's because of two reasons. “One, at least the market has got a sense that there's a government which doesn't want the market to collapse. Second, the finance minister has said there are two more announcements to go,” said the co-founder of Basant Maheshwari Wealth Advisers LLP, which managed assets worth Rs 203 crore as of July.
Finance Minister Nirmala Sitharaman announced a slew of measures on Friday, including a rollback of the tax surcharge on foreign investors and an immediate infusion of Rs 70,000 crore to boost capital of banks. She, however, didn't outline any major fiscal support or cuts in the goods and services tax — as businesses had been calling for — focusing instead on steps to spur foreign funds and lending. The government also said it would announce more measures this week.
Still, Maheshwari said these are not enough to take the markets to new highs and pull up into the bull territory. “These are just enough to hold back the collapse,” he said. “You need a little more effort and a little more on the announcement front.”
India's Nifty 50 Index has fallen 5.7 percent over the last 12 months. The slump, which mostly began in October after payment defaults at systemically important IL&FS triggered a liquidity crisis among non-bank lenders, was aggravated by several domestic and global cues during the period.
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