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India Insights

Monthly update on Indian markets
28 August 2018
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    Summary

    • There is growing recognition of GST’s benefits and long term potential, as evidenced by increase in number of tax filers over this first year and the relatively stable tax collections over the past few months
    • In August, in line with market consensus, the RBI hiked the repo, reverse repo and MSF rates by 25 bps while keeping its stance neutral. This was the second consecutive rate hike by the central bank
    • The two consecutive hikes with neutral stance indicates a shallow hiking cycle and may indicate that the probability of further hikes in the near term is low but not negligible
    • Indian equities continued to climb, even amidst trade concerns between the US and China, emerging market weakness and a depreciating INR. The rally was led by financial stocks which have experienced a strong surge in recent months after a rocky start earlier in 2018