NEW DELHI: The absence of a pre-Budget rally this time around puzzled many, especially when the government has kicked off its second term with a bigger majority.
Multiple macro-economic woes, a depressed corporate environment amid repeated debt defaults and liquidity crisis and less-than-expected tax collections have stopped stock investors from building up any big expectations from Finance Minister Nirmala Sitharaman’s first Budget.
Analysts say the market at best expects a clear direction for government policy and the economy in this Budget, and nothing more. Any failure on that front may send stocks tumbling in the coming days, they said.
“If the government decides to give a higher weightage to growth and expand its fiscal deficit target, the impact will be on interest rates in the form of higher bond yields. If it decides to solely focus on fiscal consolidation to adjust for lower revenue, it may find it difficult to pull back the expenditure commitments already made under the Interim Budget,” said Abheek Baruah, Chief Economist at HDFC BankNSE 0.11 %.
Baruah said the fiscal deficit target can optically be met if other ..
A shift from fiscal deficit target can also raise the eyebrows of global rating agencies and make domestic equities less attractive. The bond market is already worried about the issuances in FY2020.
PSU recapitalisation, addressing NBFC crisis
If higher rollover of F&O positions in select PSU bank stocks is anything to go by, the market has factored in a sizeable allocation for recapitalisation of PSU banks. Analysts estimated a capital infusion of Rs 35,000-40 ..
0 Comments