21st Century Business Herald reporter Shu Xiaoting Beijing Beijing report

On July 23, local time, the first federal budget after the Indian election was announced.The budget involves a series of measures such as narrowing the target of fiscal deficit, infrastructure expenditure, promotion of employment, and increasing capital benefits.

Indian Finance Minister Nirmala Sitharaman pointed out that the Indian government's goal is to control the proportion of fiscal deficit in fiscal 2024-2025 to 4.9%, which is less than 5.1%of the short-term budget in February.In addition, the budget raised the long -term capital profits tax of all financial and non -financial assets from 10%to 12.5%, and the tax rate of short -term capital income was raised from 15%to 20%, and the securities transaction tax for derivatives transactions was raised.

Affected by the above news, the Indian stock market fluctuated narrowly on the same day, and the benchmark stock index fell.Among them, the BSE Sensex index fell 0.13%to 80502.08 points; the Nifty 50 Index fell 0.09%to 24509.25 points.

Sandeep Nayak, managing director and CEO of the stock investment service company Centrum Broking, said that the Indian government budget has reached a perfect balance between welfare expenditure, capital expenditure and fiscal discipline.A large number of welfare expenditures are used to support small and medium -sized enterprises and agricultural departments.While increasing welfare expenditure and appropriate increase in capital expenditure, it is a good balance to control the proportion of fiscal deficit to GDP at 4.9%.However, the increase in capital profit tax and securities transaction tax is a inhibitory factor for the capital market.

Alchemy Capital Management's fund manager Alock Agavar said that the increase in capital gains tax rates caused market anxiety, and unexpected policy changes may affect investor emotions in the short term, resulting in market volatility than recentlevel.

Economic fundamental support stock market

On July 23, the Indian federal budget was announced in the fiscal year 2024-2025.The budget covers various measures to prepare for economic growth in the next stage, including focusing on improving the quality and quantity of skilled labor in the country, and providing credit guarantees for small and medium -sized enterprises.

Nirmala Sitharaman said that the Indian government will allocate 2 trillion rupees (about $ 24 billion) for employment opportunities in the next five years and increase loan expenses for SMEs.Among them, US $ 18 billion is used to support the development of the agricultural field.In addition, the Indian government will provide a 12 -month paid internship opportunity for 10 million young people of the Fortune 500 companies within five years. The training cost will be borne by the enterprise.The budget also involves the standard deduction of the new tax system increased from the previous 50,000 rupees to 75,000 rupees.

Indian Prime Minister Modi said that the budget will determine the direction of India's development in the next five years and laid a solid foundation for the country's towards developed countries.

From the perspective of the Indian investment service company Geojit's chief investment strategist V K Vijayakumar, the biggest positive factor in the budget is that the Indian government has maintained its finances and plans to reduce the proportion of fiscal deficit to 4.9%.

On the day of the budget release, the Indian stock market closed the market in a tug -of -type decline.Consumer stocks have risen due to the increase in budget commitments to increase rural expenditure, but failed to help the stock market completely rebounded from the decline caused by the stock transaction tax.Nirmala Sitharaman announced that it would raise India's short -term and long -term capital gains tax, and the Nifty 50 Index fell by 1.8%, which has been rebounded since then, and eventually retracted slightly.However, it is worth noting that the Nifty 50 Index has risen by nearly 13%since this year, and has risen by more than 24%in the past year, and has doubled in the past five years.

The founder of the stock research company SS WealthStreet Sugandha SachDeva pointed out that, due to the optimistic growth momentum, hope for policy continuity, and promoting the flow of investment after the election, the Indian stock market has remained active as a whole.Active investment in retail investors, Indian bonds are included in key global indexes, and the Federal Reserve ’s interest rate cuts are expected to increase the market.

Wu Zhaoyin, director of macro strategy of AVIC Trust Co., Ltd., told a reporter from the 21st Century Business Herald that in recent years, the Indian economic behavior has laid the foundation for the rise in the Indian stock market.In addition, India's inflation level is high. In the past four years, India's annual inflation rate has been 5%, and the price of prices has driven corporate profits; at the same time, higher inflation has also pushed up Indian asset prices, resulting in "unreal prosperity", The nominal wealth of residents has grown rapidly.These factors jointly promote the rise of the Indian stock market and will continue to provide certain support for the market outlook.

The Indian exchanges have previously launched new derivatives and reduced the minimum scale of options transactions.The demand for rapid returns in this move caused retail investors to swarmed up.According to data released by Bank of America, the average daily transaction volume of the Name options of the NIFTY 50 index since this year is about 1.64 trillion US dollars, exceeding the 1.44 trillion US dollars of the S & P 500 index.Jinnai Wealth Management

The number of Indian investors has increased significantly.According to data released by HSBC Asset Management Company, since 2020, the number of investor accounts in India has doubled to about 160 million.In May of this year, the net assets managed by the common fund industry turned to 706 billion US dollars.

The Indian Economic Survey Report (hereinafter referred to as the report) issued on July 22 expressed concern about the increasing speculation trend of the Indian stock market, warning that "the excessive self -confidence of investors may lead to unrealistic expectations for returns."When mentioning more and more retail investors participating in derivatives, the report states that derivatives dealers have lost money in most cases globally.The sharp recovery of the stock market may bring greater losses to retail investors engaged in derivatives.

In addition, the report also warned the market value of listed companies in India.As of July 22, the market value of the company listed on the NSE of the largest exchanges in India was US $ 5.29 trillion, compared to $ 3.59 trillion a year ago.In March of this year, the market value of listed companies in India accounted for GDP from 77%five years ago to 124%, higher than other emerging market economies.

Some investors are worried that the high investment enthusiasm is blowing the big stock market bubble.Data released by Asset Management Company Robeco show that in the past three years, the average premium of Morgan Stanley Capital International Indian Index is 58%compared to Morgan Stanley Capital International Asia Index (except Japan).

Wu Zhaoyin pointed out that the current valuation of the Indian stock market has a certain bubble.Based on the securitization rate (market value/GDP) used by Buffett's habit, the current market value of the Indian stock market has exceeded $ 5 trillion, and India's GDP in 2023 is US $ 3.55 trillion, that is, India's securitization rate has exceeded more than more140%.Generally speaking, 100%of the securitization rate is the right level, and more than 100%has a certain foam.This indicator measures the long -term equilibrium level of a national stock market bubble, which is of little significance for short -term indications.For example, the securitization rate of the current stock market has reached 200%, and the securitization rate of the Indian stock market is only 60%.In the long run, the stock market with large bubble stock markets will return to normal levels, and the low -valuation stock market will also rise.Therefore, the Indian stock market will return moderately in the future to reach a reasonable valuation level.

Yang Delong, chief economist of Qianhai Open Source Fund Management Co., Ltd., told the 21st Century Business Herald reporter that in the long run, India's economic growth prospects still support the rise of the Indian stock market.Considering that the current overall valuation of the Indian stock market is high, in the coming period of time, you can consider selected and sustainable growth stocks that have continued to grow and have large valuationsGuoabong Stock. You can be cautious for the production of large bubbles and lack of positive support, because there is no rise in rising.There is a certain risk after the market that does not fall.Nagpur Stock

New fiscal year GDP is expected to increase by 7%

From the recent predictions of domestic and foreign institutions, in fiscal 2024-2025, the Indian economy is expected to reach or more than 7%in a row in a row: the economic survey report released by the Ministry of Finance on July 22 is expected to be 6.5%-7%, the International Monetary Fund will increase the growth forecast from 6.8%to 7%in July, and the expected growth expectations of the Indian central bank in June will be raised from 7%to 7.2%.

Yang Delong pointed out that compared with the growth rate of 8.2%of the GDP in the previous fiscal year, the forecast of the Indian Ministry of Finance has decreased significantly.Although India's economic growth rate may slow down, its absolute value is still leading in major economies.On the whole, India's economic growth mainly benefits from the consumption potential and cost -effective labor force brought about by the large population scale.However, it should be noted that India has major problems in the system of surnames and business environment, and has also formed a certain constraint on its sustainability of its high economic growth.

The Indian Ministry of Finance pointed out on July 22 that the country's economy is expected to achieve extensive and inclusive growth in fiscal 2024-2025.India's economic development is strong and stable, showing toughness in the face of geopolitical challenges.Through recent structural reforms, India can maintain an increase of more than 7%in the medium period, but this requires joint cooperation between the central government and the state governments and private sectors.Lucknow Investment

India's consumption and investment account for 70%of economic activities.In terms of investment, data released by the Indian Brand Equity Foundation (IBEF) in July this year, from April 2000 to March 2024, foreign direct investment in India reached 97 billion US dollars.From April to July 2023-2024, foreign institutional investors (FII) flowed in nearly $ 9.67 billion, while domestic institutional investors (DII) sold $ 54.056 million during the same period.According to deposit data, foreign securities investors (FPIs) invested $ 13.89 billion in India from January to July 15, 2024.

Li Yingting, a researcher at the Bank of India Research Institute, told the 21st Century Business Herald that investment is the main force to drive India's economic growth. In fiscal 2023-2024, India's non-financial investment increased significantly by 19.8%.In fiscal year 2024-2025, under the joint influence of the domestic and foreign environment, India is expected to maintain a high investment growth trend.

In the country, the dust of the Indian election was settled, and Modi opened the largest party status of the Indian People's Party, which has opened the third prime minister's term and leadership, which has stabilized investor confidence to a large extent.Modi's third term is expected to continue to implement policies to enhance the competitiveness of textiles, electronic manufacturing, automobiles, and medicine, strengthen infrastructure construction, and further improve the domestic business environment.

Internationally, as global investment and trade activities have gradually shifted from economic benefits to political security orientation, India has more advantages in attracting the capital of the United States and Europe.

However, in the long run, there are many structural problems in India's economy and industrial development, such as low efficiency of resources and energy utilization, poor labor quality, and weak foundation for manufacturing."If the above problems cannot be effectively resolved, it is difficult to maintain high -speed economic growth in India in the future." Li Yingting pointed out.