Reason of falling Indian Market

Here are the reasons for which Sensex & Nifty can fall more in coming days….

·         LTCG on stock markets applied by the current Government started to spoil moods of market before 18 months.

-      Stop the issue of bonus huge due to tax

-      No big difference between short & long term tax

-      Big risk for capital in long run

·          Latest surcharge on FIIs or FPIs is a worst move by government.

-      FPI reporting >5 crore of income in India, the effective tax rate in derivatives goes up from 35.88 per cent to 42.74 per cent. If the same entity is earning between >2 crore and <5 crore, the effective tax on derivatives goes up from 35.88 per cent to 39 per cent. Even long-term capital gains tax and short-term capital gains tax rates will increase by 3-4 per cent for the entities making over >2 crore 

·          FIIs or FPIs have started selling everyday in Market in tune of 700 to 1800 crores everyday.

·         Buyback tax @ 20% which stop the route of withdrawal of money from stock market at huge premium. https://www.derivativelearn.com/2019/06/myth-between-dividend-and-buy-back-who-benefits-promoter-Investor-govt-steps-to-follow-for-Buyback.html

·         FIIs are not interested any more to invest in India or stay invested in India due to slowdown in India.

·          There is slowdown in Auto, Metal, Banking, Agriculture, Textile, Finance, Real Estate, Consumption, Telecommunications, Hotel, Jewellery. All the mentioned sectors are facing slowdown even worst than 2008. https://www.business-standard.com/article/economy-policy/acma-fears-1-mn-job-losses-seeks-govt-intervention-to-stimulate-sector-119072401272_1.html

·         Government just wants higher taxes from corporate and businessmen and is not even concerned about slowdown in economy or is not taking any steps to come over this slowdown.

·          All the FII money is flowing out of India and moving in countries like USA, China, Hongkong ,Brazil, Australia, Southkorea, Japan, European markets .

·         Even long term money has started flowing out of India.

·          Everyday a new group becomes bankrupt in India or declares financial problems.

-DHFL

IL&FS

BANKING NPA

BANKRUPCY BY FEW BUSINESSES

·          NBFC problems are even worst for India than subprime crisis of USA in 2008.

·          USA markets are hitting new highs and Indian markets are hitting new lows.

·         Brokerage community is slowly getting over in India.

·         Now the real pinch will come when real estate prices in tier one cities will start to crash by 30 to 40 percent how Indian stocks are crashing by 40 to 70 percent.

·          Employment is heavily down in India.

·          SME sector is bleeding like never before.

·          Money rotation has slowed so much in economy that this kind of slowdown was not even there in 2008 recession.

·         Indian GDP is projected to be 7 percent but on ground level if one observes, GDP is around 5 to 4.5 percent.

·          Even inflow of money has stopped in mutual funds, so DIIs won’t be able to support market more.

·          People are being made to invest in to mutual funds for longer term when stock prices are crashing by 50 to 70 percent like pinch of salt, people have now begun to understand to spend money or buying gold are better options than to invest in stock market.

Last few days FIIs figure shows how aggressively they are withdrawing money from stock market in India.

·         LTCG, increase of surcharge on FIIs, and slowdown in India due to Government policies and have pushed Indian markets in to a deep bear market zone which will take a long time to recover.

·         Even spending in rural areas has come down drastically.

·         Government just wants to collect higher taxes from everywhere they can; they are not bothered that Indian economy has entered in to recession.

·          Go to any city or rural areas, all the businessmen’s and even corporate are finding even difficult to remove their expenses.

DEMOTIZATION

GST

COMPANIES ACT LOT OF CHANGES LIKE JIO TRACKING, SPICE, BEN FORM, DPT FORM, KYC ETC in which owner of company busy to fulfill requirement of forms moreover huge penalty levied if date miss out.

·          Vision of 2025 and 2030 are being showed by Government to stay in power but Government is not uttering a single word about slowdown in India.

 All should tell Government to do something about slowdown in India or economy is already in bad state and will go in to worst state.

Happy Reading
Derivativelearn