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Markets will digest dismal Q2 GDP numbers after buoyant november GST Reading - HDFC Securities
After the Q3 GDP numbers came in at 4.5%, a six year low, the naysayers had a field day Friday evening finding faults with the economy and calling that the growth of the economy was even lower than the reported 4.5%.
Markets however are smarter and forward looking.
They are going to take the low GDP growth in their stride as the November GST collection has come in higher at Rs 1, 03,492. The collection is the third highest in history and has come in after two months of sub-one lakh crore collection. Also, the lower GDP means a rate cut is on the horizon to stimulate the economy.
This puts the economy on the course of a recovery. This increases the chances of a recovery in the current quarter.
Wall Street indices were down Friday on worries about the possible derailing of the Sino-American trade talks after Trump signed the Hong Kong Bill. We believe China is likely to take a statesman like approach and will likely separate geopolitics from trade. The Bill will not irrevocably harm the prospects for a phase one trade deal.
Coming to the help of the markets will be Crude oil prices, that slumped 5% on Friday as chances of a production cut extension at this week's OPEC meeting grew more doubtful.
Telecom companies could be in demand as they raise tariffs this week. The sector stocks have already run up on this news.
Airlines will be big beneficiary of the Crude slump. However, crude has partially recovered in the electronic mode.
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HDFC Securities Limited (HSL) is a SEBI Registered Research Analyst having registration no. INH000002475
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