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New Delhi: The three major events, viz., GST simplification reforms, the Trump-Putin Summit, and S&P upgrading India's sovereign credit rating, are likely to have an impact on the capital markets in the upcoming week, said market experts. Additionally, global market trends and foreign investors' trading activity are also set to impact domestic investor sentiment.
On Friday, Prime Minister Narendra Modi announced plans for GST simplification, which is expected to bring down everyday prices of consumer goods and services. The new GST slab will comprise only two slabs, viz., 5 percent and 18 percent, from the current four-slab tax structure. The reforms were necessary, as the 8-year-old tax structure was plagued with several issues like that of compliance, GST evasion, and litigation.
"The week ahead is likely to start on a cheerful note, as markets draw optimism from Prime Minister Narendra Modi's Independence Day address. His statement on a potential GST rate reduction ahead of Diwali has the potential to significantly boost sentiment and lift equities out of the bear grip," said Santosh Meena, Head of Research at Swastika Investmart, as quoted by PTI.
Meanwhile, India closely watched the Trump-Putin Alaska meeting, as it was expected that India would get a tariff exemption from the US because of the diplomatic pressure from Russia. After an almost three-hour meeting with the Russian President Vladimir Putin, US President Donald Trump said "some great progress" has been made but chose not to divulge any details of the outcome of the meeting.
"Going forward, the FII activity will be influenced by the action on the tariff front. The latest news of the easing of tensions between the US and Russia and no further sanctions on Russia indicates that the secondary tariff of 25 percent imposed on India is unlikely to come into effect after August 27th," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, as quoted by PTI.
Another event that may impact the stock market is the upgrade of the sovereign credit rating to BBB from BBB- by S&P after over 18 years. The reason for the upgrade is attributed to robust economic growth, political commitment to fiscal consolidation, and 'conducive' monetary policy to check inflation.
"Another positive factor, which can influence FII behaviour, is the rating agency S&P raising India's credit rating from BBB- to BBB," VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.
In the last week, the Sensex rallied 739 points (0.92 percent), and the NIFTY 50 surged by 268 points (1.10 percent).
(Disclaimer: This article is only meant to provide information. TV9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds, gold and crypto assets.)
