New Delhi: Budget 2024 may send stock market investors laughing to the bank since Finance Minister Nirmala Sitharaman is likely to unleash a spate of government spending to drive consumption in the economy amid an expected global slowdown. India’s stock market, currently ranked 5th largest in the world with a whopping $5 trillion valuation may surge another 20 per cent after the Budget is announced by Sitharaman in her 7th outing as finance minister.
This is likely to make India the 4th largest stock market in the world by valuation, inching close to Japan whose stock market is valued at $6.33 trillion.
Nifty at 26,000?
A Bloomberg survey of 24 respondents forecasted the benchmark NSE Nifty to end the year at 26,000 levels. One respondent predicted a further upside to the 50-share benchmark index which has already surged 12 per cent so far this year, making a new record. The Nifty closed at 24,302.15 on Thursday, July 4, 2024.
What is likely to drive Nifty to new highs?
The Nifty50 is expected to be propelled by government announcements that are populist in nature. The Modi government’s decreased majority in the Lok Sabha may result in greater Budget spending being directed towards putting more money in the hands of people to bolster popular support. Consumer stocks have been performing well on this expectation.
While food inflation has hurt the consumer’s pocket, the early onset of Monsoon has provided consumer companies focused on soybean, rice and corn a reason to smile, Bloomberg reported. Corporate sector earnings have been positive in the outgoing financial year, providing companies support to expand their margins in the current financial year, said Elara Capital’s head of research Bino Pathiaparampil.
Indian companies that are part of the MSCI India Index are likely to witness a 15.6 per cent surge in earnings per share during the calendar year 2024, compared to a 10 per cent expected earnings surge for Chinese companies, according to Bloomberg Intelligence data.
Consumption, capex and everything in between
While consumption is likely to receive a major boost from the upcoming Budget, capital expenditure on asset creation and infrastructure is expected to remain the government’s top priority, said respondents to the Bloomberg survey.
Boosted by RBI’s $2 trillion dividend payout and a strong revenue chest, Modi government 3.0 may be able to pull off a fine balance between capex push and consumption expenditure while walking the tightrope of fiscal consolidation, according to a note from analysts at US brokerage Jefferies. All said and done, Bloomberg survey respondents concurred on positive tidings for the following stocks from budget 2024:
Affordable housing stocks
Infrastructure stocks
Consumer-focused stocks
Broader repo rate sensitive stocks
Budget 2024: Prime Minister Narendra Modi government may give stock market investors and consumer a reason to cheer in its first Budget, according to a Bloomberg survey. Markets Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
