Budget 2019: Brace For Some Volatility Ahead Of July 5, Say Market Experts

Budget 2019: Economists and analysts eye significant measures to address the slowdown in growth and consumption, and prop up job creation.

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Budget 2019: Brace For Some Volatility Ahead Of July 5, Say Market Experts

India Union Budget 2019: Market participants will watch the budget announcements closely on Friday


Finance Minister Nirmala Sitharaman is due to present her first Budget in Parliament on July 5. Economists and analysts eye significant measures to address the slowdown in growth and consumption, and prop up job creation. Analysts say some volatility can be expected in the run-up to Union Budget presentation. Many experts expect the Union Budget - the first full-year by the NDA government after its return to power in May 2019 - to be pro-growth but also highlight that any major steps would further put pressure on the government's fiscal consolidation path.

Here's what the Street expects from the upcoming Budget:

Jayant Manglik, president, Religare Broking:

"Participants should prepare themselves for a volatile week, citing list of events and data which are lined up."

(Also read: Low expectations of budgetary stimulus may subdue equities, say experts)

He expects the 50-scrip benchmark Nifty index to hover in a broader range of 10,500-12,000.

"We expect the budget to be pro-growth given the decelerating economic growth and rising unemployment rate. Also, it would likely to set the roadmap for the government to implement key policies and tax reforms over its tenure."

Anand Rathi

Brokerage Anand Rathi has said in a note that it expects the government to announce a one-off increase in fiscal deficit target to 3.8 per cent of GDP, from 3.4 per cent in the interim Budget.

Noting that the expected budget-neutral market capitalisation would be positive for public sector banks, Anand Rathi said that fiscal slippage will be negative for the debt market.

(Also read: India Budget 2019 to shape future trend of equity market, say experts)

Anand Rathi expects the budget to positively impact the equity market, especially the FMCG, small durables, two-wheelers, real estate and infra companies.

(Also read: Industry body for lower taxes to incentivise equity investments)

Sahaj Agrawal, head of derivatives, Kotak Securities:

"We believe Nifty is in a structural uptrend. Recent behavioral parameters have affirmed the positive outlook. We expect the index to scale new highs in the near term and test 12300-12400 odd levels."

(Also read: Tax on capital gains may continue this year: report)

"A budget rally could be in the offing and aggressive long positions can be initiated. Support for the index is seen at 11,500. A bull call spread can be initiated at current levels."



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