Ajay Bagga says that GST tax reductions can cause the marketbound, stimulate the question

Markt expert Ajay Bagga believes that the Indian markets may have already been published and can be ready for recovery despite recent weakness. He noted that the first quarter of the lowest in eight quarters was to the lowest, which suggests that resilience. While the quarter of March was initially expected to mark the bottom of the cycle, new signals indicate that green shoots are on the rise.

The most important catalyst could, he emphasizes, be the upcoming GST council meeting.

“Look, if you look at the overall Indian economy, around 180 Lakh Crores is our consumption basket, from which around 150 Lakh Crores is the taxable part. Now, if we get a 4-5% consumption tax, it is by this month and which can see a boost, or they can give a consum. “He now told Et in an interview.

On the record of the rupid on Friday, Bagga explained that the reserve Bank of India (RBI) did not intervene this time, unlike earlier in the week when it supported the currency. The weakness, he said, was largely due to the demand for one -off dollar, the settlements of the oil payment and the upcoming US Labor Day Holiday, which caused a number of transactions. Because Wednesday was a holiday in India, RBI stayed outside, allowing the market to find its own level.

“Het was meer een geval van RBI die de markt zijn niveau liet vinden, maar RBI zal enig niveau in gedachten hebben en je zult zien dat bankinterventie terugkomt. Maandag, dinsdag deden ze het; vandaag ontbrak die interventie en vanwege een zeer sterke dollar-vraag vooral vanwege de oliën en maand en het Amerikaanse vakantie, aldus dat al die bres, aldus dat zei, aldus dat zei dat hij aldus deze in staat is om deze RS 2.000-6.000 Croses of Selling in Fiis and the American holiday to absorb.

He also emphasized the wider geopolitical perspective and noted that currency debit is often used in response to tariff wars. Allowing the rupid with 3-5% could help compensate for the rate pressure, a strategy that is comparable to what was observed in 2019. Bagga added that India should also follow the actions of other emerging markets closely. China, for example, occasionally intervened to catch short -leners and stabilize its currency. About the rise in gold and silver prices, Bagga explained that investors are leaving the US dollar, who has lost his profession due to policy security among President Donald Trump.

Another important engine is the expected rate reduction of the American Federal Reserve on September 17, who have already priced markets.

With the expected inflation almost 2.9%, lower interest rates make non-interest signs such as gold and silver more attractive. In addition, central banks worldwide diversify steadily away from the dollar by increasing the gold reserves, which stimulates the question further, he said.

On the Domestic Front, Bagga emphasized the reinforcement consumption -theme in India after the GST announcements of Prime Minister Narendra Modi. Fast-moving companies for consumer goods (FMCG), although expensive at 40-50 times ratings, remain attractive because of their high returns, negative working capital models and consistent cash flows.

Although the volumes had stagnated in the past two years, signs of revival are clear. National India, supported by increased liquidity in household bags, stimulates a strong question, while urban consumption-based staggering is set to become the strength of GST-related tax reductions. Bagga estimated that a reduction of 3-4% on the Indian RS 150 Lakh Crore taxable consumption basis could inject considerable purchasing power, which would strengthen a virtuous growth cycle.

“With the GST cut, that consumer class of 12-14 crores at the top, they get a big boost and these companies really get a boost. As I said, the entire photo is about 150 Lakh Crores that get a 3% to 4% tax reduction that can see in terms of consumption in the coming six months. He said.

((Indemnification: Recommendations, suggestions, views and opinions of experts are their own. These do not represent the views of economic times)