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A potential GST cut could inject $13 billion into consumption, but Bernstein's Venugopal Garre cautions it may hinder government capital expenditure, particularly in transportation. While consumer demand might see a temporary surge, private sector investment is unlikely to follow suit, keeping Nifty earnings growth moderate.
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Mutual funds bought Rs 45,400 crore worth of stocks in July, with State Bank of India emerging as the top pick at Rs 10,200 crore. IT giants Infosys and TCS saw inflows of Rs 9,400 crore, while Anthem Bio and HCL Technologies also attracted significant investments.
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Prime Minister Narendra Modis Independence Day GST reform announcement is seen as a game-changer, with brokerages projecting a Rs 2.4 lakh crore demand boost and a 5070 bps lift to GDP growth. Expected around Diwali, the reforms, coupled with earlier income tax cuts, are set to fuel discretionary spending, with auto and consumption stocks poised to benefit most.
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