After FM Nirmala Sitharaman announced a slew of measures in a bid to soothe dampening investor sentiment, Rakesh Jhunjhunwala said that the steps taken will revive the economy.
After FM Nirmala Sitharaman announced a slew of measures in a bid to soothe dampening investor sentiment, Rakesh Jhunjhunwala said that the steps taken will revive the economy. However, the stock market veteran noted that the reversal in investor sentiment is not an event, it is a process. “But I believe the bottoming out process will start. There is a buying opportunity in the market. The pessimism has been excessively high. If you buy now, you may get something cheap,” Rakesh Jhunjhunwala told in an interview to ET Now. In what would come as a major relief to stock market investors, Finance Minister Nirmala Sitharaman on August 23 announced the abolition of tax surcharge on foreign portfolio investors (FPIs) as well as domestic investors, among other measures.
Taking stock of the current situation in the stock market, there is excessive pessimism. Sharing his outlook, he noted that the Nifty index will not get below 10,500-10,750-mark. “I don’t know if correction is over, but there’s lot of opportunity in midcap stocks. A buyer of midcaps at this time will gain handsomely,” he said. Rakesh Jhunjhunwala expects lending to come back to the economy, after the government’s latest capital infusion. Notably, the Narendra Modi-led government has announced an “upfront” capital infusion of the budgeted Rs 70,000 crore in PSU banks.
Notably, despite the ongoing slowdown, the government refrained from providing an outright fiscal stimulus given the tight fiscal deficit targets. Rakesh Jhunjhunwala said that a 25-30 bps compromise on fiscal is not a great deal, and recommended some leniency on it. In a bid to ease the liquidity crisis, the government announced that all pending GST refunds will be paid to Micro, Small and Medium Enterprises within 30 days. In future, all GST refunds shall be paid within 60 days from the date of application. Jhunjhunwala said that these are steps in the positive direction.