Indian markets to extend gains on hopes of tax relief for companies

It is said that Indian stock markets may extend gains on this Tuesday monitoring global peers while a government panel mulls tax relief for companies.

Asian equities rose further on Tuesday as hope for stimulus in big economies tempered anxiety about a global recession. This has led to an increased appetite for riskier assets while drawing money from safe-havens such as gold and bonds.

Oil future is also down with a tentative sign that worries about an attack at a Saudi Oil field over the weekend have also eased. However, some of the traders continued to track an Iranian tanker at the center of a clash between Washington and Tehran.

Investors, for now, we’re happy by the signs that policymakers are willing to support their economies in the grip of international trade frictions, driven by the Sino-US trade war.

The focus shifted to the US Federal Reserve’s last meeting due on Wednesday. Traders are waiting for the fed’s Jackson Hole Seminar and a Group of Seven Summit for clues on what extra steps, the policymakers are going to take to boost the growth.

As per the reports of Washington Post:

“Senior White House officials are discussing temporary payroll tax cut to boost the economy.”

Hopes are raised after the reports said that Germany is ready to raise fiscal spending. Even the People’s Bank of China has taken steps in order to reduce the cost of corporate borrowing.

Last week, the trade market went into a tailspin after the treasury yield curve was inverted, with short-term yields trading above those of long-term paper. Investors who were worried about the steep global downturn, given an inverted yield curve has presaged many past US recessions, ditched riskier assets.

In India, a government panel tasked with overhauling the six-decade-old Income Tax Act. They suggested significant relief for the taxpayer. They even recommended a 25% tax rate for both foreign and local companies. They made quite a few changes in the personal tax slabs in order to benefit the middle class and upper-middle-class Indian families.

The “extreme rhetoric” of some of the South Asian leaders, who are inciting violence against India, is not at all helping the cause of regional peace, as said by PM Narendra Modi to US President Donald Trump over their telephonic conversation, a day after Pakistan PM Imran Khan compared India to Nazi Germany.