Budget 2018: With markets touching all-time highs, investors are busy preparing plans on how to make the most out of this bull run. Generally, investors turn cautious and become defensive against making aggressive bets ahead of Union Budget 2018-19. Instead they should pitch for momentum stocks. Risk-averse investors should focus on sectors such as IT, Pharma, FMCG and Oil & Gas ahead of Budget 2018. “Defensive stocks, I think HDFC Bank, Kotak Mahindra Bank, ONGC, Reliance, Maruti, Bajaj Auto, HUL, ITC and Britannia would be the stocks which could find favour among risk-averse investors,” says Shiv Kukreja of Ojas Capital. It is widely believed that Finance Minister Arun Jaitley may continue its reform agenda in Budget 2018 as well. In wake of this, investors should buy disinvestment candidates like BEML, IDBI Bank or Dredging Corp, or PSU Banks like Bank of Baroda, PNB, Union Bank or SBI, or infrastructure development companies like L&T, Dilip Buildcon or Sadbhav Engineering, says Shiv Kukreja.
Housing and agriculture are good bets too ahead of Budget 2018. “Aggressive or bullish investors would bet big on the government’s twin targets – housing for all and doubling of farm income, both to be achieved by 2022. There are many companies associated with these two sectors,” adds Shiv Kukreja.
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Even as the Sensex and Nifty scale new peaks in quick succession, with the 30-share barometer breaching the 36,000 mark for the first time ever, and the broader 50-share Nifty racing past 11,000, the equity markets will keenly watch out for cues from Union Budget 2018 which is to be presented on February 1 by Finance Minister Arun Jaitley. If history is anything to go by, benchmark indices have plunged eight out of ten times just ahead of the budget month. But, this time, the scenario is very different. Sharing his views ahead of Budget 2018, Inderjeet Bhatia of Macquarie Securities says that Finance Minister Arun Jaitley would have to balance between pushing productive investments like infrastructure and pushing more on either the rural employment guarantee programme or programmes like rural and urban housing projects.
The budget 2018 will also be the first one after the implementation of Goods and Services Tax (GST). Politically too, it will be crucial as assembly elections will be held in big states like Karnataka, Rajasthan Madhya Pradesh. Many are curious to know when and what will come out of FM Jaitley’s briefcase during the Budget 2018.