stock market will remain open on Budget Day, February 1. The bourses are expected to see a lot of action and the share market is likely to be rather volatile. Ahead of the market opening and the beginning of the presentations of the Budget, here are five things investors need to remember
Focus On Infrastructure
The Budget for the year 2024 is expected to include a significant increase in capital expenditure on infrastructure, with a special emphasis on roadways, highways, and Indian Railways. This is in line with government's goal of driving India's economic growth through investment in infrastructure.
Defence Sector Stocks Likely To Be In Focus
The governments initiative for Atmanirbharta in defence equipment manufacturing has received a major boost over the years. The sector is expected to receive further boost for indigenous production. Stocks such as Paras Defence, HAL, and MIDHANI are likely to be in focus.
Don’t Bet Big On Budget Day
Abid Hassan, the co-founder of options trading platform Sensibull, said that for traders, betting big on events when uncertainty is fairly high may be risky. It is advisable to wait for a chance where there is a clean, one-sided movement in the market to make your move.
Fiscal Deficit Target
Goldman Sachs anticipates that the central government will announce their achievement of the fiscal deficit target of 5.9 per cent of GDP in FY24 ahead of the interim Budget 2024.
The fiscal deficit, which is currently at 4.5 per cent of GDP between April and December 2023, as opposed to the budget estimate of 5.9 per cent of GDP, affects the money supply and interest rates in the economy. A higher interest rate leads to increased capital costs for the industry, lower profits and consequently, lower stock prices.
Stick To Limit Orders
Hassan also advised traders to stay away from market orders. "On volatile days, market orders are generally a bad idea." He told traders to stick to limit orders, instead.