Industry & Economy
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Budget
'Market pessimism to end soon'
Our Bureau
Mumbai
,
July 8
FOREIGN and domestic fund managers feel confident that the Budget would have a favourable impact on the bourses in the long term. The pronouncements in the Budget indicate that the earlier fears of economic reforms grounding to a halt were unwarranted, feel fund managers.
"It is a pro-reform Budget. Markets were expecting fiscal discipline, growth and reforms, and the Budget has delivered on all three parameters. This is a step forward from what we were expecting and there does not seem to be any worry on political influences on economic reforms," said Mr Andrew Holland, Chief Administrative Officer & Executive Vice-President - Research, DSP Merrill Lynch.
Foreign institutional investors are also upbeat about the increase in foreign direct investment cap on telecom, civil aviation and insurance sectors.
"The Budget shows a clear emphasis on fiscal discipline and consolidation. The Budget also seeks to promote investments into the country through equity as well as the debt route. Abolition of long-term capital gains and lowering of short-term capital gains should bring more retail investors back into the market," said Mr Srinivasan Varadarajan, Managing Director, Head of Markets, JP Morgan Chase Bank.
Domestic fund managers feel confident that the market pessimism would be short-lived. "The market will comfortably correct itself. The upside of the turnover tax outweighs its disadvantages. The taxation is now simple and easy to understand," said Mr A.K. Sridhar, Chief Investment Officer, UTI Mutual Fund, the country's largest asset management company.
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