Weekly Commentary – 27th September 2019

Nifty50 continued its positive march ending 2.1% over last Friday’s closing. Midcap (-0.4%) and Smallcap (+0.7%) continued to underperform Nifty50. On the sectoral front, FMCG (+4%), Bank (+3.1%) were among top gainers; Pharma (-3.6%) and IT (-1.6%) declined.

Market Updates:

• Economy to start looking up in H2 of current fiscal – Finance Minister has said that she is hoping the country’s economy will start looking up in the second half of the current financial year (FY20) as consumption rises and banks increase their lending operations. The minster mentioned that economic slowdown seems to have bottomed out and the coming festive season will help the economy start looking up. 
• Corporate tax cut likely to support growth, but will widen fiscal deficit in near term: Fitch: According to Fitch Ratings, steep cut in tax paid by companies may support efforts to stimulate investment and GDP growth in the medium term, but will cause the fiscal deficit to widen in the near term. It added that as such, slippage from previous government fiscal targets this year (FY19-20) is now very likely. 
• ADB lowers India’s GDP growth forecast to 6.5% for FY20 – The Asian Development Bank (ADB) has lowered India’s GDP growth forecast to 6.5 percent for the current fiscal. However, it said India is expected to rebound to 7.2 percent growth in FY21.