Early Signs of GST Boost
Ajay Bagga shared his views on the GST-driven boost and pointed to strong immediate indicators: “After the GST cut, auto sales have been strong, e-commerce offtake is good, and used car platforms reported 400% higher volumes yesterday. Large ticket purchases had slowed due to Pitru Paksha, but those orders are now coming in. We need a month or so to see real impact, but early signs are promising.”
Sectoral Movements Amid Volatility
When asked about the ongoing sectoral swings, Bagga noted: “We are not fully out of the woods. Markets need sustained earnings growth to get a real leg up. GST has boosted sentiment, but fundamentals must follow. Some sectors, like defence, are seeing frothy moves followed by sell-offs when valuations get high.”
He added that multiple headwinds are still in play: “Concerns like the H-1B changes in the US create uncertainty, though the direct impact is limited. Markets may remain cautious until there is clarity. Any minor trade deal after Mr. Goyal’s visit could lift sentiment, but I am not overly optimistic this year, especially before the Bihar elections.”
Looking Ahead
Bagga emphasized the importance of fundamentals: “Markets have been below last September’s levels for 12 months, which is longer than usual. They are primed for momentum, but we need a fundamental shift in earnings. When green shoots appear, momentum could return quickly.”While GST has provided a strong psychological boost, the sustainability of the rally depends on earnings growth and clarity on external factors such as trade and US policy. Investors are advised to track early indicators from sectors like autos and e-commerce for signs of a broader economic recovery.
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