Budget 2019: While the stock markets have reacted negatively to the Union Budget 2019, experts say that FM Nirmala Sitharaman’s Union Budget has positives for housing, infrastructure, PSU bank and the ETF space. Taking stock of the market’s reaction to the Budget, Jimeet Modi, Founder & CEO, SAMCO Securities said that the Street seemed disappointed post the announcement. “Holistically, the Budget was truly wholesome, rational and long-term goal oriented. Nirmala Sitharaman has stressed upon measures to improve inclusive growth, reduce income inequality, build digital ecosystem, create a cashless economy and bring about a transparent and honest regime. There were certain hard-core punches which will change the dynamics in certain industries,” he added. Going forward, the stock market is expected to be range bound, accoring to Naveen Kulkarni of Reliance Securities. “There are positives for the banks while for sectors like IT there will be challenges. Apart from banking and housing finance companies, the budget has been positive for infrastructure and cement sector,” Naveen Kulkarni, Head of Research, Reliance Securities told Financial Express Online.
Also read: Union Budget 2019: Key reasons why Sensex, Nifty fell after Union Budget speech By FM Nirmala Sitharaman
According to Mustafa Nadeem of Epic Research, infra and construction space is looking attractive following the announcements in Union Budget. “Sectors to invest are Consumer discretionary – Auto & consumer durables, Private banks, beneficiaries of affordable housing, good quality companies which have been forced to increase their public holding to 35%, Industrial engineering companies, Few consumer staple companies who are indirect beneficiaries of increased spending by the government,” George Heber Joseph, CEO & CIO, ITI Mutual Fund told Financial Express Online.
Which stocks should investors bet on following this budget? “Based on the union Budget, we can consider investing in companies like Dabur India, Britannia Industries, Godrej Agrovet, Rallis India, State Bank of India, HDFC and L&T. These stocks are promising prospects and would stand to be key beneficiaries,” Jayant Manglik, President – Retail Distribution, Religare Broking told Financial Express Online.
The overhang of the Budget is likely to continue in the next week as the offshoots of certain implementations will be visible in the capital markets, SAMCO Securities said in a note. As the divergence between Nifty and Nifty Midcap/ Small cap indices in June is way above the past few years, there is higher likelihood of a larger correction in large caps compared to the broader indices, added the research firm. “A higher correction is therefore in the making and investors must ideally look for booking profits in large cap companies as the process of mean reversion has started, years of out-performance will now be followed by under-performance. Divest and avoid autos and highly valued companies having high promoter holdings,” Jimeet Modi, Founder & CEO, SAMCO Securities & StockNote said.
(Please consult your financial advisor before taking any investment related decision)