All eyes on how markets react to GST implementation

Blog meant for 3 June 2017 Monday

Dear friends,

Nifty recovered towards the end of the day on Friday after having started weak. It closed higher by 17 points. The global cues were all negative on Friday evening. We will have to see how Asian markets open tomorrow. Also, we have to see how markets perceive the GST Implementation which happened on 1 July.

Tomorrow will be the first day of trading for Indian markets after GST implementation.

As per 30 days moving average, Nifty is in Don’t buy zone. The indications for short term for individual stocks are as follows:

THE HOLDS ARE – DIVISLAB,  ITC, Titan, Axis Bank 

Wait to Sell –  HDFC, HDFC BANK, MARUTI, Reliance

Don’t Buy –  LUPIN, BHEL, ONGC, Infosys, TCS, L&T, ACC, M&M, SBI, Asian Paint

Buy – YES Bank (Inspite of the negative sentiments in the markets, it went up on Friday. It can be bought for short term if you have the risk appetite since it could fall back to Sell indication if markets are negative in the coming days).

Long term investors can continue to invest to fulfill their objectives and plans in life.

Today, we had a very successful First Session of the Bangalore Investors’ Forum. More than 155 people attended the Session. There are vacancies for another 45 members. Hence, if interested, please email successdigest@gmail.com to know the procedure to register.

Please note that the Sessions will be conducted in a mixture of Kannada and English but predominantly Kannada since most people are comfortable in that language.

—–

Question of the Day

Question – Is GST applicable to Stock Markets?

Answer –

GST is Goods & Service Tax. It does not apply directly to the Stock Markets. However, since Stock Markets is a medium through which investors invest in companies, GST will have an indirect effect on the Stock markets. Depending on the company and its products and services, GST will affect them differently. The complete and true picture of how GST may affect businesses will be understood in the coming quarter and year. The prices of products will get revised based on the GST and based on that the Stock Markets may react to it.

There was earlier a Service Tax on the brokerage charged for share transactions by a broker. Earlier it was charged on 15% on the brokerage paid by you. Now, since GST applies, it will be 18% on the brokerage. This is the minor direct effect on Stock Markets.

All the best!

Dr.Bharath Chandra & Rohan