Indian markets have witnessed declines on weekly basis after budget. The decline has been mainly due to lack of investor confidence and selling by foreign funds. Comments on Indian stock market by Vivek Ranjan Misra, Head of Fundamental Research, Karvy Stock Broking....

The Indian market is down, when the region is largely flat, and US futures are flat. There are multiple reasons, firstly while the measures on FPI regulations are good, the market still awaits clarification on the tax proposals for FPI’s made in the budget.

Secondly the market is getting impatient with regards to the prospects of a stimulus package from the government and the comments made by some government officials have dimmed hopes. We continue to expect some weakness in the near term, but expect the economy to stabilize in Q2 FY2019-20 and recover in the second half.

Quote by Mr. Rajiv Singh, CEO, Karvy Stock Broking

The Finance Minister has undone most of the damages caused by her maiden Budget speech by rolling back the surcharge on FPIs and domestic investors. This is a welcome step and markets are expected to cheer for it. Release of Rs 70000 crore upfront for the PSU banks and other major announcements for easing crisis in NBFCs will help in credit off take.

Similarly, allocating Rs 30,000 crore to NHB will help affordable housing and realty sector. The decision to pass on rate cuts to the borrowers will be a big relief and will help in reducing cost of capital besides boosting credit growth & consumption. The symbolic measure of withdrawing imprisonment clause for CSR violations will help sentiment of industry & wealth creators. Slew of announcements for Auto sector will help in the revival of Auto industry.

The best part is, FM is now open to act on Industry feedback and has promised to announce a few more stimulus measures in the coming weeks. After this much awaited booster doze, I expect market to form base around current level and inflows will be witnessed in broader markets among quality mid cap & small cap stocks. We may witness rally in the favorite stocks of FIIs which majorly constitute our benchmark Index.