As the Budget approaches, investors are speculating on how Finance Minister Nirmala Sitharaman will shape the markets with her proposals. With strong government receipts and a focus on balancing populist measures with growth, the markets are eagerly anticipating the announcements on July 23.
CEO for institutional equities at Centrum Broking, Nischal Maheshwari, advises investors to consider sectors that will benefit from the government’s infrastructure push and potential advancements in the defense sector. As the government prioritizes rural revitalization, investors should focus on rural-driven consumption themes and sectors aligned with infrastructure development.
Despite the coalition government formed by the Bharatiya Janata Party and its pre-poll partners, investors remain optimistic about the government’s ability to manage policy making over the next few years. While there may be concerns about the coalition partners extracting their share, the government is expected to strike a fine balance between populist measures and growth.
Valuations in the market are reasonable, with positive outlooks in sectors like information technology, banking, and FMCG. The IT sector is facing challenges due to a slowdown in discretionary spending, but opportunities are arising in consulting, BFSI, and TMT segments. On the banking side, increased tax-free interest income in the Budget could boost deposit growth and overall credit expansion.
Foreign investors are likely to continue driving the market, although Indian markets face competition from other emerging markets with elevated valuations. Domestic flows are expected to remain the primary driver of Indian bourses, with foreign inflows playing a supporting role.
Overall, investors are optimistic about the Budget announcements and the government’s ability to navigate policy making. With a focus on growth-oriented sectors and rural-driven themes, investors are positioning themselves for potential opportunities in the market.
