Shares of Automobile companies and PSUs (public sector undertakings) are seeing decent gains amid choppy markets ahead of the Union Budget 2017, where Finance Minister Arun Jaitley is expected to announce measures boosting rural incomes and ambitious targets to raise revenue through disinvestment.
BSE Auto index was up 0.4%, with Bharat Forge, Ashok Leyland, Tata Motors and others in comfortable green. Maruti Suzuki, on the other hand, rose 1.4% to a record high of Rs 5,979.2 as its January sales jumped 27% on-year despite the limited purchasing power due to demonetisation.
Arun Jaitley is expected to take measures to boost rural incomes and job creation in an effort to ease the pains of demonetisation.
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India’s largest carmaker Maruti Suzuki sold 1.44 lakh cars in January against 1.13 laks units in the same month a year ago. The growth was driven by both exports as well as domestic sales.
BSE PSU index rose 0.84% with most banks recording handsome gains, as recent developments showed that the post-demonetisation recovery in situation is faster than expected. The government has a tough task ahead of not letting the fiscal deficit gap slip more than warranted, while taking steps to spur the economy with higher public spending. To this end, Jaitley may set higher targets for raising revenue from disinvestment of equity stake in PSUs for the next year, buoyed by healthy collections so far in the current financial year. This would give the investors an opportunity to buy into profitable PSUs.
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The government has a target to earn Rs 56,500 crore by divesting its stake in public sector undertakings in the current financial year 2016-17, and has already garnered about Rs 30,000 crore so far this fiscal through share sale and share buyback by the companies.
Broader markets continue to be cautious, waiting to see if Jaitley announces more populist measures and thus risking fiscal prudence. BSE Sensex was down 0.1% at 27,627.74 points and NSE Nifty fell 0.12% to 8,550.95 points, paring early mornings moderate gains.