The Indian market is witnessing a renewed sense of optimism following the recent GST restructuring and encouraging GDP data. Investors are closely watching how these developments will shape consumption trends and corporate performance in the coming months.

ET Now asked market expert Karthik Kumar for his broad view on the current market scenario.

Kumar explained that the GST changes have been received positively by investors, but future market direction will hinge on consumption trends and external factors.

“Since we heard about GST restructuring, the markets have taken things quite positively. From here on what will decide the course of the markets is to what extent we see a pickup in consumption and those are the data points we will look out for increasingly in the festival season given the cut in GST as well,” he said.

He further said that if India does get any positive signs in terms of the tariffs and the ongoing negotiation then that will be another added fillip to the markets.

Kumar is of the view that the market is structurally positive for the long run for a couple of reasons. “One is that we have underperformed emerging markets quite significantly now as a result of which our valuations are in line with longer term averages. Valuation premiums to emerging markets are in line with longer term averages. So, while our market might not be attractive in absolute terms, in relative sense it looks reasonably placed from a valuation standpoint. Second is that while the earning season was tepid and we did see earnings cuts to FY26 post the earning season, the extent of the cuts have gone down,” he said. When asked about the impact of GST cuts on consumption and whether portfolios had been positioned accordingly, Kumar noted that sector-specific factors play a key role.

“It comes down to sectors and subsectors. So, for instance in some cases, a cut in GST could actually help aid volume growth. In some cases, in some industries, it may not be as elastic as one would think,” he said.

As the festival season approaches, market participants will be closely monitoring consumer spending patterns, tariff developments, and corporate earnings trends. With valuations now aligned with long-term averages and a gradual reduction in earnings cuts, experts see structural support for medium- to long-term market growth.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)