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Market wishlist for 2016: GST, more rate cuts & return of FPIs


New Delhi: Passage of the long-pending GST bill, lower interest rates and a bounce-back in the foreign portfolio investments, as also a stable rupee and good monsoons, figure high on the New Year wishlist of Dalal Street to help it regain the 30,000-point milestone.

It was a roller-coaster ride for the stock market in 2015 where the benchmark Sensex lost 1,381.88 points or 5 per cent, after gaining nearly 30 per cent in 2014. The index had last registered an yearly loss in 2011 when it fell 24 per cent. It also came off sharply after peaking above 30,000-points mark, a milestone it crossed in March but could not retain.

Listing out the markets’ wishlist for the new year, Bonanza Portfolio’s Associate Fund Manager Hiren Dhakan said, “GST Bill being passed in the Parliament, further rate cuts by RBI, stable Indian rupee against the US dollar, no further devaluation of Chinese Yuan, normal monsoon, fresh policy measures by the government to promote foreign investment and stable oil prices.”

GST, which seeks to simplify and harmonise the indirect tax regime across the country with a single uniform rate, has been stuck for a long time in a political gridlock.

“Passage of the GST bill is likely to be the priority for the government in the new year. Government spending towards infrastructure and ease of doing business will be other wish list which will be keenly watched. As inflation trajectory continues to be low we can expect 2-3 more rate cut decision by RBI during the later part of 2016,” said Vinod Nair, Head Fundamental Research, Geojit BNP Paribas Financial Services.

“As far as FIIs flow is concerned, world liquidity hunts for the best opportunities in the market and India is amongst the finest economies in the EMs available at fair valuation,” Nair said.

Last year also saw the worst single-day performance by the Sensex on August 24 when it fell sharply by 1,624.51 points or 5.94 per cent triggered by a Chinese rout.

Delay in key reforms including GST, global headwinds and uncertainty about an interest rate hike in the US, had kept the markets on the edge in 2015.

“Passing of key reform bills like Goods and Services Tax (GST), increased capital expenditure by companies, increase in inflow of foreign money, good monsoon, improved macro-economic condition, improvement in consumption demand, strengthening of rupee against dollar,” said Gaurav Jain, Director of Hem Securities.

Analysts said that GST Bill passage and the Union Budget would be the key triggers for Indian markets in the New Year.

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