Terming the Cabinet reshuffle as a “non-event” for markets, Singaporean brokerage DBS today said the key factor to watch out for is the progress of Monsoon Session of Parliament and if the government is able to make some headway on getting the GST bill passed.
“The reshuffle will be a non-event for the markets… the focus is on Monsoon Session of Parliament that kick-starts on July 18,” it said in a note.
Specifically, it said the investors will be looking for progress on Goods and Services Tax (GST) Bill in Rajya Sabha where the Modi government lacks adequate numbers to get the landmark legislation passed.
“While the government lacks a majority in Upper House, there are signs that more regional parties might back the legislation,” DBS said, while commenting on the long pending reform on the indirect taxation front.
In the Cabinet reshuffle and expansion, which saw induction of 19 new members into the Council of Ministers two days ago, DBS said there has been a focus on the poll-bound Uttar Pradesh that sends 31 lawmakers to the Upper House.
The foreign broking house said even though two new deputies have been announced for Finance Minister, there have not been any changes to the key Ministries, including Defence, Finance, External Affairs and Home Affairs.
The “key change” has been in the Human Resource Development Ministry where Prakash Javadekar replacing Smriti Irani has hogged the headlines, the brokerage said.
Beyond domestic politics, the markets will be focusing on the continuing impact of Brexit, which has rattled the world markets, it said.
“Recent tentative calm has been derailed by renewed GBP (pound) depreciation and equity weakness threatening to spill over to global/Indian markets,” it said.