Saturday, 27 February 2016

DIALWEALTH KEY BUDGET EXPECTATION

DIALWEALTH EXCLUSIVE & BUDGET EXPECTATION

PBoC(China) and BoJ(Japan) hint at more easing

Both China’s and Japan’s central bank hinted at the possibility of taking additional accommodative measures in their respective monetary policy. The ChineseShanghai Composite index rebounded from a 6% loss on Thursday as the governor of the People's Bank of China Zhou Xiaochuansaid at the G20 finance meeting that the Asian giant has more room and tools to combat the economic slowdown.

Bank of Japan governor Harihuko Kurodaalso left the door open to more easing as he stated in a parliamentary session that it was “technically possible” to take a key rate further into negative territory.

KEY BUDGET EXPECTATIONS

The above news is positive for Indian markets it means easy liquidity once budget is out of the way and uncertainty is over Indian markets may see buying interest

The key concern for Indian markets is on taxation issue in the past also fiis were not happy when the MAT issue was raised (minimum alternate tax) this time also there is speculation that finance minister might remove STT(securities transaction tax) and change Long term Capital gains limit from 1 year to 3 year any such move on LTCG would have a far negative impact but changes are very low

To cut short if fiis get clear road map on taxation from the selling would stop and $ will start chasing growth as there is ample liquidity in world and expect USA cost of money(interest rates) are trending lower

If finance minister gives a clear road map on front of fiscal deficit and if fiscal deficit TARGET is in the range of RBI  then Even RBI will surprise Street with 25bps rate cut in first week of March

We @DIALWEALTH are expecting
1)CLARITY ON MAT (RETROSPECTIVE TAXATION)

2)CLARITY ON LONG TERM CAPITALS GAINS TAX

3)FISCAL DEFICIT ROAD MAP

IF THE THINGS PAN OUT THE WAY WE ARE EXPECTING WE MAY SOON SEE BUYING INTEREST EMERGING LTCG ISSUE ARE PULLING BACK MARKET MAKERS TO BUY MIDCAP STOCKS AT THESE ATTRACTIVE LEVELS ONCE THERE IS CLERITY ON THAT GOOD QUALITY MIDCAPS WILL SEE MAJOR BOUNCE BACK ONCE AGAIN I WOULD LIKE TO STRESS ON THE POINT GOOD QUALITY MIDCAP

AS OF NOW I FEEL 6910 ON NIFTY  IS IMPORTANT LEVEL AND IF BUDGET HAD CLARITY ON TAXATION FRONT NIFTY WILL RALLY TO AROUND 7300 LEVELS

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