Budget 2017: Capital gains, corporate tax will make or break mkt, says Udayan : 30 Jan 2017

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The most important week of the year is here for share traders, and veteran commentator Udayan Mukherjee believes that two issues will “make or break” the stock market.

In an interview , Mukherjee said capital gains tax and corporate tax are the parameters that the Street would be watching when Finance Minister Arun Jaitley presents Budget 2017 on February 1.

Any taxation on equity markets, though unlikely, will definitely irk the markets, the CNBC-TV18 Consulting Editor told CNBC-TV18, adding that the markets haven’t factored in imposition of long-term capital gains tax.

While the effect of a direct tax cut depends on the amount of relief the government provides, it may not be, however, a game-changer, Mukherjee said.

Commenting on recently market rally, he said that Nifty hitting 8600-8700 levels surprised many of the Dalal Street. The rally was partly driven by a combination of factors such as good earnings report card of companies, global upmove and Budget expectations, he said.

On February 1, consumer-related plays will come out depending on tax cuts announced by the Finance Ministry, Mukherjee said, expressing reservations that such rally may not be sustainable. Housing companies stand to benefit on tax exemptions, he said.

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