Now that the political uncertainty is out of the way, everyone is now looking ahead at other triggers. And as the market meanders through a lackluster, listless day of trading, we look at what could possibly be some of the triggers in the coming weeks.
The first and foremost in the immediate two days is the swearing in ceremony on 30th May. We all know how the PM of India is but all eyes will be on the cabinet – who will hold the all-important four portfolios - finance, defence, home and external affairs portfolio? So the selection of ministers on Thursday will decide the movement of the indices.
Once that is out of the way, it would be about the RBI; the interest rate decision is scheduled for 6th June and that will have a bearing on the market. There is a growing voice that maybe the RBI needs to concentrate more on sagging growth and less on the inflation. But then the big bull in the china shop is – if inflation has been low for so long, how come the consumption story is so sad? Obviously, the low farm income is at the root of all the gloom currently and that is what needs to be fixed on an urgent basis. And yes, speaking of low inflation, it was food inflation all along which was low, other goods and services remained costly. With the seasonal factor coming in, cost of fruits and veggies has been rising. So let us not say that RBI needs to do away with the inflation narrative. Growth is govt’s job and that is what the new ministry will have get done first.
After the RBI, it will all be about policy decisions. The 17th Lok Sabha is expected to begin its session from 6th June but the date will be finalized only after the swearing in. The ceremony will take place at 7 pm.
And then of course there is the big announcement of the Union Budget. The government had presented an Interim Budget for 2019-20 in February. A full Union Budget is likely to be presented in July and all hope that it will kick start growth and give a boost to consumption.
Over and above all these political happenings, another major trigger will be monsoon and the ensuing crop harvest. All said and done, Modi or no, Budget or no, ultimately, its only a good harvest which will spur the Indian growth story.