As Finance Minister Nirmala Sitharaman is set to present the Union Budget 2024 today, the spotlight will be on sectors such as infrastructure, railways, defence, renewable, which are likely to get higher budgetary allocation this time. Besides, the market will also keep an eye on the government’s stance on the capital gain tax on equities.
The markets have been steadily climbing each week, currently reaching all-time highs. “There’s a trend of selective buying in leading companies across various sectors, bolstering the index despite signs of overbuying in the short term,” says Ajit Mishra, SVP, Research, Religare Broking.
Mishra has recommended investors to consider stocks such as Ultratech Cement, Nuvoco Vistas, State Bank of India (SBI), and Hindustan Unilever Ltd (HUL). According to him, Ultratech Cement is poised to benefit from increased infrastructure spending; while Nuvoco Vistas is well-positioned in the growing construction sector. While SBI is set to gain from potential reforms and financial sector boosts, HUL is expected to thrive with rising consumer spending and favourable policies.
Domestic brokerage JM Financial has said that markets would be keenly awaiting any adverse changes in the capital gain tax on equities. In case there is no change in capital gain tax it would be considered positive for Indian equity markets.
The key budget picks of JM Financial are Mahindra & Mahindra, Hero Motocorp, ITC, Sumitomo Chemical, RIL, Power Grid, NTPC, Sanghvi Movers, Bharat Electronics, Bharat Forge, VA Tech Wabag, L&T, DLF, Ambuja Cement, APL Apollo, PFC, and IRCON.
Axis Securities in a note says that the impact of the Union Budget on the equity market has reduced notably over the past few years with the government undertaking most of the reforms outside the purview of the Budget. “As it is the first full-year budget after the formation of the NDA 3.0 government, market participants continue to view it as a critical catalyst stimulating the Indian economy’s growth and thereby the Indian market.”
Axis has picked Hero Motocorp, Ultratech Cement, Nestle, NTPC, Praj Industries, Inox Wind, J Kumar Infra, Ahluwalia Contracts and V-Mart as preferred Budget day stocks. Among non-coverage list, the brokerage is betting on M&M (Rural Play), Power Grid (Power Transmission Capex), Va Tech Wabag (Sustainable Water theme), Bharat Electronics (Indigenisation of defense sector), Sarvotech power (EV charging station theme).
Choice Broking is betting on Bharat Electronics Ltd (BEL) as top Budget 2024 stock. The defence stock has recently reversed from its 50-day exponential EMA with significant volume, suggesting a potential reversal and a robust bullish trend, says Sumeet Bagadia, Executive Director at Choice Broking.
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