According to Jaideep Hansraj, MD & CEO, Kotak Securities, the government has sacrificed fiscal deficit for growth. “No tinkering on taxes, including personal tax and a giant leap of divesting two state-run banks and opening up of the market by making way for the LIC IPO and foreign ownership in insurers have been a welcome move and the primary reason for the rise in stock market.”
“The Budget rightly decided to focus on economic growth by raising expenditure and allowing for a wider fiscal deficit in these pandemic times. Importantly, a far higher spend on capital expenditure is a move in the right direction. Domestic manufacturing is going to be a big growth engine with previous corporate tax reductions, correction of inverted duty structures and a lot more subsidy to come on the PLI front,” said Amar Ambani, senior president & institutional research head, Yes Securities. “What appealed most to the stock market was the absence of moves like wealth tax or increase in LTCG on equity investments. Unless there is a devil in the fine print, the Budget has been kept simple and (the FM) has played the right cards.”
On the sectoral front, market players felt that the banks, infrastructure, materials and metals sector could benefit by the thrust given to privatisation and spending in the Budget, said Deepak Jasani, head of retail research, HDFC Securities. Among the sensex stocks, ICICI Bank, HDFC and HDFC Bank contributed the most.
With the Budget behind it, the market’s direction is now expected to be dictated by how foreign funds react to the proposals, the spread of the coronavirus and the roll-out of the vaccine in India and around the world, market players said.