Source – https://www.livemint.com/market/stock-market-news/budget-2024-railways-infra-defence-agri-sectors-that-stand-to-get-major-push-as-listed-by-6-of-top-market-experts-11706859351466.html
Publisher – Mint
Finance Minister Nirmala Sitharaman tabled her sixth straight Budget in the Parliament yesterday, February 1. Since this is an election year, a full budget will be presented in July, after the formation of the new government.
The interim budget focused mainly on fiscal consolidation with an increasing focus on sectors including infrastructure, railways, defence, green energy, tourism, agriculture, and EV.The Fiscal Deficit target for FY25 was set at 5.1 percent of the GDP, better than expected, while the FY24 target was also revised down to 5.8 percent. Meanwhile, the capex target of FY25 was increased by 11.1 percent to ₹11.1 lakh crore.
“The FM has continued to focus on strengthening of domestic macro factors including sustained investments in Infra, Agriculture, Domestic Tourism, and also sticking to fiscal responsibility with a lower fiscal deficit which could be music to the ears of foreign investors and impending $25 billion bond inclusion in June as lower budget deficits and pared borrowings will help bring down yields. It could possibly open the door for a ratings upgrade,” said Pradeep Gupta, Co-founder & Vice-chairman, Anand Rathi Group.
Going ahead, now that the budget is behind us, investors will focus on the remainder of December quarter earnings as well as the upcoming RBI policy next week and other major macro cues like bond yields, dollar, FPI flows, etc.
“Now that the two big events are behind us the market is likely to consolidate. The non-populist Budget focused on fiscal consolidation is a big positive. Global cues are better since the mother market US is appreciating the favourable trends in the US economy after the brief disappointment with the cautious Fed message. It is evident that the US is heading for a soft landing and rate cuts are coming. Correction in the dollar index to 103 and the US 10-year falling to 3.88 percent may restrain the FIIs from selling. The near-term risk in the market is the high valuation which can trigger corrections on some negative news. Expect high volatility in the near term,” said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
“The FM has continued to focus on strengthening of domestic macro factors including sustained investments in Infra, Agriculture, Domestic Tourism, and also sticking to fiscal responsibility with a lower fiscal deficit which could be music to the ears of foreign investors and impending $25 billion bond inclusion in June as lower budget deficits and pared borrowings will help bring down yields. It could possibly open the door for a ratings upgrade,” said Pradeep Gupta, Co-founder & Vice-chairman, Anand Rathi Group.
Going ahead, now that the budget is behind us, investors will focus on the remainder of December quarter earnings as well as the upcoming RBI policy next week and other major macro cues like bond yields, dollar, FPI flows, etc.
“Now that the two big events are behind us the market is likely to consolidate. The non-populist Budget focused on fiscal consolidation is a big positive. Global cues are better since the mother market US is appreciating the favourable trends in the US economy after the brief disappointment with the cautious Fed message. It is evident that the US is heading for a soft landing and rate cuts are coming. Correction in the dollar index to 103 and the US 10-year falling to 3.88 percent may restrain the FIIs from selling. The near-term risk in the market is the high valuation which can trigger corrections on some negative news. Expect high volatility in the near term,” said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Anirudh Garg, Partner and Fund Manager at Invasset, PMS
While this rise may appear modest, the already large base of capex ensures continued growth across capex-related sectors such as defence, infrastructure, and railways. These sectors are now poised for enhanced value addition and earnings growth, owing to the substantial groundwork laid previously.
Furthermore, sectors like affordable housing, renewable energy, and solar panels are set to gain momentum, fueled by government initiatives. Despite the approaching elections, the government’s commitment to gradually increasing the capex target, while aiming to maintain the fiscal deficit at the projected 5.1 percent, signifies a strategic approach to sustainable economic growth.
Our analysis suggests that while price discovery in these sectors has been significant, future investments require a more specialised focus. Invasset remains vigilant and prepared to navigate these developments, advising our clients to consider these sectors’ nuanced opportunities.
Read here: Budget 2024: Bonds rally, yields drop on lower than expected govt borrowings
Harjeet Singh Arora, Managing Director at Mastertrust
In the long run, key sectors poised to benefit include infrastructure, renewable energies, aviation, railways, metros, power, and capital goods, as they receive government support through increased spending. Additionally, the government is fostering tourism by offering long-term interest-free loans to promote renowned tourist destinations.
Ravi Singhal, CEO, GCL Broking
Our top pick would be Bank of Baroda. In infrastructure the top pick is L&T. It is crucial for the rural economy too; our top pick is Parag Milk. It is an overall good budget for the upcoming market sentiment.
Mukesh Kochar, National Head of Wealth at AUM Capital
The Interim Budget seems to be very positive and growth-oriented. It is a well-balanced budget where the FM has been able to keep the fiscal deficit low along with a focus on growth and welfare measures. The road map that they have created in the last 10 years has been extended further in this budget with a focus on Infrastructure, Railway, Renewable, Housing, manufacturing, etc. Capital expenditure remains high which drives the economy in the long term.
