'Correction in Nifty seems more or less done, growth in 2-wheeler space to taper off'

To keep the economy growing faster, the GST Council on Saturday slashed rates on several items: televisions, refrigerators, washing machines, electrical appliances, perfumes, handicrafts, among others. These products are set to get cheaper, and millions of consumers, small traders and artisans will benefit from the move ahead of the festival season.

The Council significantly pruned the list of items placed in the highest tax slab of 28 percent. Commenting on the same, Manish Gunwani, Chief Investment Officer - Equity, Reliance Mutual Fund, said the GST rate cut is a political imperative to revive growth.

Moving to the market, he feels the pull back in the Nifty seems to be more or less done now. The Nifty has gained nearly 10 percent from 2018 lows and rallied 4.5 percent in current calendar year on top of the 29 percent upside last year. Recovery from lows was driven by reasonable valuations in select largecaps, hope of further earnings recovery in FY19 and stability in the rupee-dollar and rising crude oil prices.

June quarter earnings, so far, have been stable and better. Even the management commentary has been positive on expectations of a normal monsoon. Gunwani said one shouldn’t read too much into the first quarter's performance with respect to stocks like HDFC Bank.

The two-wheeler space has seen high growth for the last 20 years but Gunwani doesn't expect that sector to be a high-growth one for the next 10 years. "There could be highest growth in select companies but not the entire space."