InvestorQ : What could be the major stock market triggers for traders and investors in the week following the Union Budget?
Lavanya Subramanian made post

What could be the major stock market triggers for traders and investors in the week following the Union Budget?

Answer
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Niti Shenoi answered.
7 months ago


Here are some of the triggers for the post budget week.

· Insurance companies are likely to react negatively to budget changes. In addition, the LIC listing and making Section 80C investments optional likely to hit demand for life and health protection.

· Zero allocation for recapitalization of banks is negative for PSU banks. Budget has put a halt to bank recap after allocation of Rs.3.5 trillion.

· Higher fiscal deficit target at 3.8% likely to hit bond yields and will be negative for rate sensitives like banks, NBFCs and real estate.

· Personal tax tweaks are likely to encourage spending over saving. Shift to new regime positive for FMCG and consumer durables stocks.

· RBI policy during the week will surely be keenly watched. With inflation at 7.35%, rate cuts almost unlikely

· All eyes will be on the $174 billion China stimulus. Apart from negating the impact of Corona pandemic, it will make EMs more liquid.

· Allocations to water and infra positive for stocks like L&T, IRB and VA Tech Wabag which could benefit from big orders.

· The Assemble in India approach is positive for electronics and could open doors for big outsourcing contracts for Redington and Dixon Tech.

· Data centre parks will be positive for IT stocks like HCL Tech, Tech Mahindra and Wipro as also online education stocks.

· Watch out for some of the major earnings expected this week which include Titan, Bharti, Cipla, Lupin, M&M and Sun Pharma.

· Weak oil will keep rupee strong in the coming week. With Brent crude falling to $56/bbl, FMCG stocks to benefit and rupee to remain steady on import comfort.

· Manufacturing PMI hits 8-year high of 55.3 for January 2020. This is likely positive for most manufacturing stocks.

· ITC could be the big loser on the downside; being a heavyweight. The skewed duty structure to work against the company.