Indian equity markets may need to swallow a bitter pill: Sukumar Rajah

In our view, the Indian stock market owes its positive performance so far this year to major developments in government reforms and the spending habits of the growing middle class

There has been much uncertainty surrounding India’s recent reforms and how they may impact the economy and stock market. Some observers have argued that the government’s move to remove cash from circulation to thwart corruption has been a failure. And, some say the implementation of the new Goods and Services Tax (GST) could be more disruptive than expected.

While it is still too early to be certain exactly how these reforms will play out, our belief is that over the longer term, comprehensive reforms should likely overhaul the current system and improve efficiency.

In particular, we will be closely watching the Indian