(Photo: Mint)
(Photo: Mint)

Opinion | Manic Monday

Part of the fall was due to a tense Jammu & Kashmir after the Centre revoked Article 370 of the Constitution

Equity markets began the week on a jittery note, with bears tightening their grip as security concerns at home and the trade war overseas looked poised to escalate. The Sensex slumped over 1%. The rupee slid sharply against the dollar. Part of the fall was due to a tense Jammu & Kashmir after the Centre revoked Article 370 of the Constitution. A consolation was that India wasn’t alone. Markets tanked globally on US President Donald Trump’s declaration that more import tariffs were on the way.

That triggered a rush for safe-haven assets. In India, longer-horizon factors were also in play: the economy’s deepening slowdown, for example. The volatile political situation has had its own effect. To counter downward trends, the government should push ahead with reforms. Some of its controversial tax proposals could also do with a revisit. On this, it’s a relief that the finance minister has said the government is ready to hear investors out. The budget proposal to raise the minimum free-float of listed firms to 35% of total equity has weighed stocks down, too. Surely, a rollback or two could backstop market sentiment without hurting the budget arithmetic.

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