Indian market which rose to a fresh record high last month saw some profit booking at higher levels. Meanwhile, the Nifty50 which rose a little over 7 percent in the first half of 2018 starting from April 1 to September 29, 2017.
According to CLSA a cut in auto fuel taxes will impact government revenues by 16 bps of GDP on a yearly basis.
The firm believes that revenue reduction and uncertainties with respect to GST collections could raise fiscal concerns. Meanwhile, the FPI sentiment on the equity could be weak until corporate earnings recovery sets in.
Going forward, the firm expects market performance is going to be remain subdued until the year end, while long term optimism on housing-led recovery is intact.It replaced State Bank of India with HDFC Bank in its model portfolio.