- by Yashvi Tomar
- 30th Sep 2020
Mr. Market Awaits Another Round of Stimulus From the Government; Can it Lead to a Roaring Rally?
The market went through a lot of ups and downs last week but finally market gained some strength on September 28 as media reports suggested that the government could be in the process of announcing some stimulus measures for the economy which saw its worst quarter in history as GDP contracted by 23.9 percent.
The BJP government is just a few weeks away from announcing another round of stimulus measures aimed at creating jobs and pushing demand, as it looks to turn around India’s ailing economy which saw its steepest ever contraction in April-June.
According to experts The Sensex and Nifty50 have already rallied by over 50 percent each from the March lows, but a roaring rally post the stimulus measure, if any, is unlikely.
Arjun Yash Mahajan, Head – Institutional Business at Reliance Securities told Moneycontrol said “The stimulus is expected after a steepest ever decline in GDP contraction in the Apr-Jun period, but the positive rub-off effect of the stimulus on markets would not last for more than a week,”
He added “The US elections, scheduled for November 3, 2020, will keep global markets volatile, to say the least. Add to this, Covid-19 cases, globally and in India, show no sign of peaking / slowing down and with increasing news and expectations of mini lockdowns in various states/cities,”.
India saw perhaps the biggest fall in GDP in its independent history, as April-June GDP contracted 23.9 percent year-on-year. Private consumer spending, the bedrock that contributes more than half the Indian economy, got chipped by 27 percent.
Dinesh Rohira - Founder, CEO - 5nance.com said “The fiscal package from the government to address the demand-side economics coupled with measures to boost the business activities will help the market to uplift the sentiment,”
