Yes, of course, GST and the corresponding headlines also make major steps on the markets and stock prices. But since a whole series of sectors are involved, how do you view this news flow and is there a certain sector where you are the most bullish?
Sunil Subramania: Let me say so. GST must be seen in combination with S & P’s upgrade from India. The two go hand in hand because they came within one day in succession.
The reason I say this is because the domestic purchase aid has been strong – the pastor has been healthy and fund managers have also purchased. In fact, they have considerably reduced their level of money from the highs from March to the end of June. However, this purchase support was not particularly focused on the consumption space before the GST announcement. After GST, the wider consumption package attracted the attention of managers of domestic funds and considered a considerable rally.
But in my opinion, the real revival for the market will come from the S&P rating upgrade, while it runs into a repetition of India in the eyes of FIIs. This is crucial because FII support has not been consistent. For example, they arrived in April, May and June, but in July they started selling and in August they continued to sell. Fii streams are therefore very mixed.
Another factor that India did not help is ratings. Because India is a relatively high-quality market, growth triggers must be very clear. For me, GST offers that growth trigger, giving Fii’s confidence to come back to India – that is point number one.
Secondly, the S&Pupgrade means that when FIIs model the risk of India – whether it is to decide how much overweight or underweight, or even with algorithmic trade – the rating will play its role. This should also increase the interest of the FII.
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