Budget Reactions: Cut in STT likely to boost sentiments: Bharti Axa Life

Sandeep Nanda
Bharti AXA Life Insurance

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This year’s budget is a workman-like balancing act and the government has done a decent job given the challenges in the economy. On the positive side – we are happy to see the delivery on the fiscal promise-estimate at 5.2% FY13 & 4.8% FY14 but lack of further visibility on policy initiatives for the coming months is a disappointment.  From an equity markets perspective  – reduction in STT should boost sentiment and the additional 5% surcharge on corporate tax would impact benchmark earnings growth marginally (< than 2%). It is a bit frustrating to see a new set of concerns on FII taxation which could cause uncertainity unless quickly resolved. Tomorrow onwards for the markets – it’s going to be back to business and focus will come back on bottom-up earnings growth, the economy, valuations and the global risk environment.