NEW DELHI: The monsoon session of parliament draws to a close on August 13, and market participant as well as industrialists will be keenly watching the government’s efforts to find a way to get parliamentary approval for the Goods and Services Tax (GST) Bill amid a belligerent opposition.
The bill was was tabled in the Rajya Sabha on Tuesday, but a debate was blocked by a vociferous Congress which raised procedural issues.
According to analysts, if the GST Bill is not cleared in Wednesday’s session, there is a high likelihood that market could crack by 2%-3%, which translates into a slide of 250 points on the Nifty, and over 800 points on the Sensex from current levels.
Benchmark indices marked their lowest close in two weeks on Tuesday, weighed down by concerns that the key reform on goods and services tax might get delayed amid continued protests by the opposition.
According to media reports, if the bill is not passed in Rajya Sabha in these two days, the government could call a short special session of both Houses of Parliament to pass the GST Bill.
The monsoon session of Parliament appears to be heading for a washout with the Congress-led Opposition stalling proceedings daily ever since Parliament convened in mid-July, ET said in a report.
“With only two days to go, the GST Bill appears unlikely to pass both houses in its amended form and is almost certain to miss the government’s implementation schedule of April 1, 2016. Many CEOs felt that this would be a big blow,” added the report.
Indian market has felt the heat in the past few trading sessions due to frequent parliamentary logjams. This has left the market clueless as there is no indicator to the initiatives presented by government to be turning in a practical mode, say experts.
“Nifty Future is trading in broad range of 8330 – 8670 levels. On daily charts, it is looking strong and expected to break the range on the higher side,” says Vivek Gupta, CMT – Director Research, CapitalVia Global Research Limited.
“On the upside, if it manages to break and sustain above its important resistance level of 8,670 on closing basis, its next resistance is at 8,800 levels and on the downside, immediate support level is at 8450 and the next important support level to look for is 8330,” he added.
Gupta is of the view that if the GST Bill is not cleared in Wednesday’s session, market can see a further correction by 2%-3%.
Most analysts on the Dalal Street are of the view that markets can go into a broad sideways consolidation range in case the GST doesn’t get passed due to the political logjam.
“Non-passage of these critical bills will hamper the growth outlook for the economy. We believe the Nifty will oscillate between 8300 and 8600 and in case of a global correction, we may go down to 8000,” says Jimeet Modi, CEO, SAMCO Securities.
“Equity MFs also have seen highest redemption in the past 4 months. In such a scenario, 2-3% correction or even more cannot be ruled out. In case of a correction to these levels, it should be treated as a great buying opportunity for the next leg of the bull market,” he added.
Finance Minister Arun Jaitley slammed the Congress, saying the party was raising various issues just to stall the country’s growth. A Constitution amendment requires Division of votes for which every member has to be in his or her seat.
“It is undoubtedly very unfortunate for India as a whole. The market also feels that justice has not been done and there should be a debate, there should be discussions,” says Sudip Bandyopadhyay, President, Destimoney Securities, in an interview with ET Now.
“We were all looking forward to the passage of the GST Bill at least, because we all thought that there was very little dispute on the economic logic of the GST bill,” he added.
Bandyopadhyay still hopes that by some miracle, this (GST) may get passed in the Rajya Sabha over the next 24 to 48 hours.