The Indian stock market had a positive start on Thursday, with the Sensex gaining 6.75 points and opening at 71,729.64, while the Nifty rose by 5.95 points, starting the day at 21,731.64. This modest increase indicated a cautious optimism among investors. Among Nifty companies, 22 advanced, while 27 declined. Top gainers included BPCL, Eicher Motors, Cipla, M&M, and Maruti, while top losers comprised LTIMindtree, Titan, LT, Wipro, and Grasim.
This positive trend follows a challenging January for Indian indices, marked by a 0.5% loss attributed to global cues and market volatility. Varun Aggarwal, founder and managing director of Profit Idea, noted that investors are closely watching the upcoming Union Budget and the Federal Reserve policy meeting on January 31, expecting their impact on the market. Analysts suggest the budget may focus on capital expenditure, manufacturing, and macro stability, emphasizing economic growth through increased capital investment.
The expansion of Production-Linked Incentive (PLI) programs to boost manufacturing is anticipated. As the Interim Budget on February 1 approaches, economic indicators present a mixed picture, with GST collections reaching a second all-time high, but the growth in output of eight core industries slumping.
During the budget announcement, attention will be on crucial areas such as Long-Term Capital Gains (LTCG), disinvestment, infrastructure capital expenditure, and proposals for maintaining fiscal discipline. Speculations about the budget being a vote on account persist, but expectations are high for crucial announcements related to income taxpayers, salaried individuals, and sectors such as electric vehicles, real estate, cryptocurrency, and renewable energy.
In the agricultural sector, efforts are directed towards achieving a $100 billion export target by 2030, with a focus on real-time information, weather patterns, crop insurance, and export connectivity. Putting a spotlight on plant-based proteins not only follows worldwide trends but also has the potential to place India in the USD 1.3 trillion Meat Industry. An anticipated separate scheme to encourage plant-based proteins is likely to give a boost to the agri-processing sector.
Despite positive changes at the national level, the effective dissemination of government plans, budgets, and grants at the local level, especially concerning startup grants, remains a challenge. Expectations for the budget also extend to the travel and tourism sector, with hopes for a focus on new destinations, tourist hubs, and global prominence, anticipating support in transportation, infrastructure, and remote accessibility to catalyze tourism growth in offbeat locations.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, emphasized that while both the Fed decision and the Budget will influence the market, the focus will be on the Budget. While the interim Budget is anticipated to mainly serve as a vote on account, the Prime Minister’s remark characterizing it as a ‘blueprint of intent’ has heightened expectations for substantial insights into what may unfold in the complete Budget and beyond.
While the market eagerly anticipates the budget announcement, both investors and analysts hold a cautiously optimistic outlook for the future path of the Indian economy. Vijayakumar advised long-term investors not to be swayed by dramatic moves and instead focus on high-quality stocks with good long-term growth prospects.
