Finance Minister Nirmala Sitharaman to Present Union Budget 2024-25
Finance Minister Nirmala Sitharaman is set to present the Union Budget for 2024-25 on Tuesday, July 23, 2024. The Union Budget has been a key trendsetter for the Indian stock market, with the announcement being associated with market volatility.
Historical Performance of Indian Stock with Caution
The Indian stock market is trading with caution ahead of the Union Budget 2024, scheduled to be presented by Finance Minister Nirmala Sitharaman on Tuesday, July 23. The market is expected to be volatile, with investors closely watching the budget announcements for any signs of policy changes or reforms that could impact the economy and stock prices.
Expert Insights on Budget 2024
Sunil Damania, Chief Investment Officer, MojoPMS, feels that a trading approach is less sensible compared to an investment strategy as budget’s impact on market volatility has diminished. Damania says that the market will be closely monitoring potential changes in the capital gains tax treatment on equity, and there is a need to revive the consumption cycle, making tax rebates essential to stimulate this area.
Key Positives and Negatives to Watch Out for in Budget 2024
The market will be closely monitoring the following key factors in Budget 2024:
- Changes to the capital gains tax on equity
- Tax rebates to stimulate consumption
- The government’s utilization of the record RBI dividend
Trading Strategies for Investors Before and on Budget Day
Historically, the Budget’s impact on market volatility has diminished, with many non-Budget days exhibiting higher volatility. Damania advises adopting a long-term investment approach in equities rather than a trading perspective, as numerous reports suggest that most traders incur losses.
FII Flows and Market Valuations
In the last financial year, Foreign Institutional Investors (FIIs) recorded substantial inflows. However, it is uncommon for Foreign Portfolio Investors (FPIs) to sustain record inflows for two consecutive years. The high valuations of the Indian market may deter significant investments from FIIs.
Market Expectations: Capital Gains Tax, Consumption Cycle
Investors are closely watching the budget for any changes to the capital gains tax treatment on equity, which could impact stock prices. Additionally, there is a need to revive the consumption cycle, making tax rebates essential to stimulate this area. The Reserve Bank of India’s record dividend provides the government with more flexibility to invest in infrastructure without compromising the fiscal deficit.
Suzlon, Borosil Shares Gain Ahead of Budget
Despite the caution in the market, shares of Suzlon and Borosil have gained ahead of the budget. Suzlon, a renewable energy company, has seen its shares rise by 5% in the last week, while Borosil, a glassware and consumer products company, has seen its shares gain by 3%.
Analysts’ Views: Trading Strategies, Sector Preferences
Analysts advise adopting a long-term investment approach in equities rather than a trading perspective, as numerous reports suggest that most traders incur losses. They also recommend focusing on sectors such as FMCG, capital goods & infrastructure, and pharmaceuticals, which are expected to benefit from the budget announcements.
Conclusion:
The Union Budget 2024-25 is expected to be a key trendsetter for the Indian stock market, with historical data showing a negative trend on budget announcement days. Experts advise adopting a long-term investment approach in equities rather than a trading perspective, and focusing on sectors such as FMCG, capital goods & infrastructure, and pharmaceuticals. Despite market caution, shares of Suzlon and Borosil have gained ahead of the budget.
FAQ’s
Q: When is the Union Budget 2024-25 being presented? A: The Union Budget 2024-25 is being presented on Tuesday, July 23, 2024.
Q: Who is presenting the Union Budget 2024-25? A: Finance Minister Nirmala Sitharaman is presenting the Union Budget 2024-25.
Q: How has the Indian stock market performed on Budget Day in the past? A: The Indian market has closed in a negative note in eight out of ten sessions on the budget announcement day in the last ten years.
Q: What are the key factors to watch out for in Budget 2024? A: The key factors to watch out for in Budget 2024 include changes to the capital gains tax on equity, tax rebates to stimulate consumption, and the government’s utilization of the record RBI dividend.
Q: Which shares have gained ahead of the budget? A: Shares of Suzlon and Borosil have gained ahead of the budget.
Q: What is the advice of experts for investors ahead of the budget? A: Experts advise adopting a long-term investment approach in equities rather than a trading perspective, as numerous reports suggest that most traders incur losses.
