Indian markets after being worst performer in Asia in 2011, have so far recovered around 6 per cent in the January month. The bulls should stay in the whole of 2012, believes finance minister Pranab Mukherjee who is going to meet stock exchange officials on February 7.
In 2011, Indian share markets slipped around 25 per cent and the Indian government got similar dents on its image after rolling back market friendly policies, thus leaving the skeptics worried even more about health of Asia's third largest economy.
The meeting is eyed as crucial as it would be followed by Union Budget 2012-13, where markets have pinned lots of hopes. The buzz in markets is that Mukherjee might discuss the policy of allowing foreign individual investors to invest directly in Indian equities. Earlier this month, FM had allowed Qualified Investors (QFI), which has so far attracted lot of rich-queries from countries such as Poland, United Arab Emirates (UAE).
Also market participants have been waiting to see a reduction in securities transaction tax (STT). The move, if get nod of FM, will certainly boost activity in the markets. Earlier, the STT reform met with huge resistance from revenue department last year.
Markets are also filled with rumours that budget 2013 may also see government imposing transaction tax on trades in commodities exchanges. Amid weak equity market conditions and the need to bring foreign capital back into markets, the meeting is crucial and would also decide the market performance during 2012.
Dion Global Solutions Ltd