- The Indian market had a minor decline in January.
- The manufacturing push, capex, and macro stability are anticipated to be the main areas of attention for this budget.
- Analysts predict that before the Budget, the market would be more erratic than after.
With the Nifty hitting many highs and the Sensex touching 73,000 for the first time, the Indian market had a minor decline in January. Before the interim Budget’s announcement on February 1, 2024, the market could become erratic.
The manufacturing push, capex, and macro stability are anticipated to be the main areas of attention for this budget. Future trends in various industries are determined by the financial goals and policies of the government.
The government’s main goal will be to promote economic growth through increased infrastructure development and capital expenditure; manufacturing and renewable energy sectors will probably receive extra support.
Announcements about salary classes and rural populations are anticipated in the run-up to the general election. Analysts predict that before the Budget, the market would be more erratic than after. Since there will likely be more volatility over the next 15 days, traders should consider hedging their positions, according to Ventura Securities Head of Research Vinit Bolinjkar.
The average returns in the Nifty are 0.23 percent, according to Apurva Sheth, Head of Market-Perspectives & Research at SAMCO Securities. The average returns one week before the budget are -0.58 percent, while the average returns one week following the budget are 1.37 percent.
Fear and uncertainty frequently cause the Nifty to trade lower ahead of the Budget. If the budget is unfavorable, prices instantly adjust and reach an intermediate low on the day of the budget. Even in such cases, it tends upward if the budget contains a pleasant surprise.
Hedonova’s CIO, Suman Banerjee, notes that while the Interim Budget-2024 may not result in big changes to investor portfolios or the stock market, it is still important to carefully consider the market implications of any major announcements.
Political and economic forces will likely impact market dynamics, with a clear preference for capital spending over populist initiatives with short-term effects. Investors must comprehend this government strategy as they navigate the financial markets in the coming year.