The Indian stock market has rebounded strongly since initial setbacks following the Lok Sabha election results, with the Sensex surpassing the 81,000 mark and the Nifty nearing 25,000. Market experts believe that the upcoming budget could sustain this positive momentum.
Dr. Ravi Singh, SVP - Retail Research at Religare Broking, highlighted the prevailing optimism in the market ahead of the budget. He emphasized expectations of increased capital expenditure (capex) and policy continuity, which are anticipated to benefit specific sectors significantly.
Singh pointed out defense, infrastructure, and Public Sector Undertakings (PSUs) among the sectors likely to gain. Investors are hopeful for substantial allocations and policy support in these areas. The focus on indigenisation in defence is expected to boost domestic manufacturing, reduce import dependency, and stimulate job creation.
Singh also noted plans for the railways to expand operations and modernize infrastructure, including technological upgrades, enhancing passenger experience, and improving safety measures.
The government's strategy includes prioritizing capital restructuring for PSUs to enhance their financial health and operational efficiency. Investors are particularly keen on potential reductions in Securities Transaction Tax (STT), which could provide significant relief.
In terms of infrastructure, Singh highlighted expectations for new projects and upgrades, underscoring the potential extension of successful schemes like the Production Linked Incentive (PLI). These initiatives have proven effective in stimulating economic activity and are anticipated to receive further capital allocations.
Finance Minister Nirmala Sitharaman is scheduled to present Budget 2024 on July 23, coinciding with the beginning of the Monsoon Session of Parliament on July 22. The announcements in the budget are poised to influence market dynamics significantly, with investors eagerly anticipating policy measures that could sustain the current market momentum and foster economic growth.
