The government may come up with measures to boost the economy through tax cuts or expenditure outlays tells AK Bhattacharya, Editorial Director, Business Standard.

He adds "apart from the US elections, other global factors that can impact the market in India is Brexit and we have to see how it plays out which is expected by end of this year. What impact it would have on the European economy and therefore the Indian market and how we respond will be determining that."

He highlights that "the other factor that is domestic is that at what point the government thinks is appropriate to come up with a solid stimulus in form of either a tax cut or fresh infusion of capital into the economy to step up the pace of the economic activities especially in the infrastructure sector." Indian Economy to Contract by 10.3% in 2020; to Bounce Back with 8.8% Growth in 2021: IMF.

According to him, "the recovery seems to be patchy in various sectors before it becomes sustainable and grow roots. It would be appropriate for the government to step in at the right time."

He notes that "there is room within some government finances to come up with those ideas of tax cuts or expenditure outlays. This could happen before the end of the winter probably in December or January. One can expect more announcement to come up from the government side on either by way of tax rationalization measure or investment outlay." COVID-19 Impact: School Closure May Cost Over USD 400 Billion to India, Cause Learning Losses, Says World Bank.

He adds "the market will continue to remain volatile for some time and diversion in the market in certain categories will continue and that itself will show up in the form of volatility. What has happened in the market is that small-cap has come down while the mid-cap has gone up."

He further says "the sectors such as IT, auto, and pharma brings lots of hope for the market. The sectors for which we should be concerned are hospitality and aviation."

(The above story first appeared on LatestLY on Oct 16, 2020 06:11 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).