The stock markets are on a free fall from last few days, and is in situation the one question which is ranging across every investors mind is “Which are the stocks to invest today?’’
Before looking at the answer to the question about the stocks to invest today, let’s understand the reason why Indian equity markets are experiencing a gloomy scenario and how long this is likely to last.
Fears of further escalation in US-China trade war and flight of foreign funds are the two main reasons behind the market correction. The Indian indices started correcting since 5 July, when the Budget proposed a levy of an additional surcharge on individuals and trusts earning more than Rs.2 crore and Rs.5 crore, respectively.
This move impacts Foreign Portfolio Investors (FPIs) adversely as they are set up as non-corporate vehicles. Typically, FPIs are set up as trusts or limited partnerships in their home jurisdictions which is not recognized under India tax laws as it refers to the Indian Partnership Act.
According to data released on August 2, Foreign Portfolio Investors (FPIs) have actively sold over Rs.20,500 crore worth of stocks in the Indian stock markets in the last few weeks. As a result of this, the benchmark BSE Sensex has corrected from 39513.39 points on 5th July to 36699.84 points on 5th August. A fall of 2813.55 points in one month.
Coming back to the question of stocks to invest today, an investor has to understand that the concerns about the FPI tax are likely to ease out soon. In fact, Prime Minister Office (PMO) and finance ministry’s top bureaucrats recently held discussions over the suggestions and submissions by foreign portfolio investors (FPIs) regarding the surcharge issue. FPIs have sought rollback of surcharge. If implemented it will be seen as a confidence-boosting signal from the Narendra Modi led NDA 2.0 government.
So rest assured, one can surely expect the FPI tax-related concerns of the stock markets to ease out soon. Further escalations in US-China trade war may or may not happen in the coming days. The past history of Indian stock markets reveals that while there may be a temporary knee-jerk reaction in the form of correction, there is no severe or long term impact.
That’s why instead of worrying about these factors, an investor should rather focus on the stocks to invest today.
Infrastructure: The Sunrise Sector To Find Best Stocks To Invest Today
Best stocks to invest today include stocks of top-performing businesses from infrastructure sector as the government has allocated a massive 100 lakh crore in the budget 2019 for infrastructure development over the next five years. As India races towards becoming a USD 5 trillion economy, infrastructure will play an important role. Hence investors should look at companies with expertise and capacity to execute large scale projects in the construction of rails, roads, airports, ports, flyovers etc.