Share market unimpressed with Budget 2023, eyes US Fed meet for cues; what should investors do?

Nifty, Sensex give up intraday gains to end mixed on Budget 2023 day. Share market eyes US FOMC meeting outcome for directional cues.

Nifty, Sensex, share market, Budget 2023
Markets will react to the outcome of the US Fed meeting in early trade on Thursday. Besides, the overhang of the Union budget and scheduled weekly expiry would further add to the choppiness.

Indian equity markets remain unimpressed with Budget 2023. After jumping nearly 2% intraday briefly, benchmark indices BSE Sensex and NSE Nifty 50 nosedived to end flat. According to analysts, there is nothing one can find negative in the budget announcement, and it could be game changer budget for the next few years. However, it failed to cheer Dalal Street investors. “Markets entered into the budget with a negative tone and the initial uptick might have triggered a few stop losses. Markets will react to the outcome of the US Fed meeting in early trade on Thursday. Besides, the overhang of the Union budget and scheduled weekly expiry would further add to the choppiness. A decisive close below the 17550 zone in Nifty would strengthen the bears. We thus reiterate our negative view and suggest limiting trades until we see some stability,” said Ajit Mishra, VP – Technical Research, Religare Broking Ltd.

After Budget 2022, markets eye Fed meet for cues

“From the standpoint of the financial markets, this is a very excellent budget because no negative news is good news. The fact that the long-term capital gains (LTCG) have not changed is really positive news for the stock market. Positive adjustments in indirect taxes are particularly beneficial to the stock market. Fiscal deficit restraint is also welcome news. Overall, the market is pretty well, but all balls are now in the Fed’s court, as today is the Fed meeting, which is now more crucial. The only disappointment is no word about disinvestment which is not good for PSU. 8 on a scale of 1/10,” said Surendra Kumar Jain, Managing Director, Shree Bahubali Stock Broking Ltd.

Markets to move higher on back of pro-growth measures in Budget 2023

“An extremely well-balanced budget focussed on growth driven by capital expenditure while giving an adequate push to rural welfare and agriculture. Government borrowing is well-calibrated, and it is a significant positive. The fiscal deficit target of 5.9% indicates a considerable degree of prudence. On top of this, relief to the middle class on the income tax front is the cherry on the cake. At this point, it is difficult to find any shortcomings. The budget has delivered on all the expectations very well. In the short term, we expect the markets to move higher on the back of pro-growth measures announced in the budget and less fear of the government crowding out private investments due to fiscal prudence shown by the government,” said B Gopkumar, MD & CEO, Axis Securities.

Budget 2023 win-win for households, corporates

“The market had mixed expectations on the budget presuming it to be populist and low elbow room for the government ahead of the slowing economy, high inflation, and interest rates. However, the government has taken it to a new zone with a well-tuned perfection between growth and stability. The rise in capital expenditure by 33% to Rs 10 lakh crore is the shot in the arm heading a multiplier effect on the economy. While high amount of schemes to rural economy, and tax benefits to taxpayers will enhance consumption growth in India. Much beyond expectations, a win-win for households and corporates. It is a 10 on-10 budget,” said Vinod Nair, Head of Research at Geojit Financial Services.

Bull’s eye Budget; thumbs up from markets

“India budget 2023 has offered a multi-dimensional view. The 3 Cs which stand out are – Capex increase – consumption boost – capital gains tax status quo. Mindful of the fact that there is hardly any space for fiscal expansion. FY 24 FD is pegged at 5.9% and expected to see progressive reduction by FY 2026. Clearly, a bull’s-eye budget satisfying most strata of the society and of course a thumbs up from the market as well,” said Lakshmi Iyer, CEO-Investment Advisory, Kotak Investment Advisors Ltd.

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First published on: 01-02-2023 at 16:19 IST