If the year 2019 was a tale of two halves, the New Year is unlikely to be any different. Just as the markets underperformed in the first half of this year and recovered after the corporate tax cuts in September, strategists expect the second half of 2020 to be better than the first half.
Markets could get a boost if the government’s divestment programme stays on course and the Union Budget gives a fillip to consumption through cuts in personal income tax rates. Credit Suisse in its India Market Strategy report for 2020 says, “In our view policy interventions to get a growth rebound to 6.5% are not politically challenging, but it is unclear when these actions may be taken.” It’s the anticipation of sops for individuals that could keep the market rallying till the Union Budget.
