Market sentiment improves as government announce boosters

The Indian stock markets saw a bearish trend for more than 45 days as the Union Budget 2019-20 amended higher taxation on the super-rich and Foreign Portfolio Investors (FPIs) registered as trusts and associations. The trend is all set to reverse as the government has decided to address the investor’s concerns.

Last Friday, Nirmala Sitharaman, the Finance Minister of India, announced the rollback of the increased surcharge on FPIs, leaves more money at the banks’ disposal, and eased credit rules. All of these are considered economic boosters and is expected to revive the ailing Indian capital market. 

The Indian markets have responded well to the boosters on Monday by shooting up by more than 2%, which is the biggest single-day gain in three months. BSE Sensex recorded an increase of 2.16%, which translates to 792.96 points, while NSE Nifty rose by 2.11% or 11,057.85 points.

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The BSE stocks were in focus on Monday. 1,705 BSE stocks shot up whereas 811 of them experienced bearish trend while 123 of them did not see any change. Notably, the banking stocks were on the rise yesterday. The BSE Bankex rose 3.57% as the government proposed to infuse capital of Rs 70,000 into the state-run banks. 

FPI outflow, which was one of the significant concerns is now expected to shed as the government has decided to withdraw increased surcharge on the FPIs registered as trusts. FPIs are expected to pump big money into the Indian capital market as they did during the 2019 Lok Sabha elections. 

The Indian equity market is now expected to fare much better. The Indian stock markets finally found some light on Monday. The Asian markets too are expected to boom this week as Donald Trump, the American President, indicated trade talks with his counterparts in Beijing.