Stocks to Buy Before Budget 2019: Bet on policy reforms, thrust on infrastructure, capex

Best Stocks to Invest Before Budget 2019-20: Finance Minister Nirmala Sitharaman may provide a sustained thrust on roads, ports, sanitation, irrigation to revive the capex cycle. We take a look at best stock bets ahead of the Budget.

Written by Sushruth Sunder

July 5, 2019 09:42 IST

good news for Farmers, Farmers can get extra income, modi govt new scheme, solar panel scheme for farmers, PM Modi, PM kisan

ऊर्जा मंत्री ने कहा कि नई स्कीम अगले 15 से 20 दिन में शुरू होने वाली है. इससे किसानों को एक लाख रुपये तक की आमदनी हो सकती है.

Best Stocks to Invest Before Union Budget 2019: Even as investors keenly await Union Budget 2019, stock market experts say that the task for Modi 2.0 seems to be cut out, given deep agrarian distress, slowdown in Automobiles and consumer demand, NBFC crisis, and rising pressures in real estate and housing. Stock market investors will be looking forward to corporate tax cut, STT rationalisation and managing the fiscal deficit. A cut in STT (Securities Transaction Tax) or allowing it to be written off as tax input remains on top of the Budget wishlist of market participants. Brokerage firm Prabhudas Lilladher expects that FM Nirmala Sitharaman would provide a sustained thrust on roads, ports, sanitation, irrigation to revive the capex cycle.

Union Budget 2019 LIVE: FM Nirmala Sitharaman meets President; Sensex breaches 40,000 mark

“We expect thrust on improving drinking water availability and river linking, imposition of tax on buyback of shares and tax relief to middle class under basic tax exemption or higher limit in 80CC,” Prabhudas Lilladher said in a note. L&T, Ashok Leyland, M&M, HDFC Life, Titan Company, Crompton Consumer are among the key budget picks of the brokerage firm.

Also read: Budget Economic Survey 2019: Iron out PSU inefficiencies to drive growth, says Kotak’s Nilesh Shah

According to consulting technical analyst Milan Vaishnav, the broader technical and the global macro environment do not provide a good ground for any substantial rally in Sensex and Nifty. “Apart from the knee-jerk reactions that the Markets may give, the coming event of Union Budget 2019 may largely remain a non-event for the markets,” Milan Vaishnav told Financial Express Online.

Watch FE Explained video: What is Union Budget?

The market is looking forward to the first Budget from the NDA government after being re-elected as it would set the foundation for the policies and reforms for the next five years, Motilal Oswal, CMD, Motilal Oswal Financial Services said. “The biggest expectation from the new Finance Minister is to revive growth and bring the economy back on track. There has been an increasing pressure on the government to increase spending and to defer the fiscal deficit targets. However, going by the past track record of the NDA government, we expect the fiscal prudence to be maintained,” he added. Brokerage firm Motilal Owal’s top Budget picks include L&T, Cummins India, Ultratech Cement, SBI and NTPC.

According to IndiaNivesh, given the huge divergence of the Nifty with the smallcap and midcap stocks, the next leg of rally in the markets could be finally from the space. “Till October 2018, the broader market indices MIDCAP 100 and SMALLCAP 100 were moving in tangent with the benchmark indices. Since then, Nifty surged around 20% due to substantial buying in heavyweights while the small and midcap stocks maintained their southward journey due to lack of buying interest,” said the research firm.

Top stocks picks ahead of the Budget by Prabhudas Lilladher: