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Market Eye
| Week ahead: Market may rise ahead of Budget | 28/06/2009 11:39:01 | Despite recording losses on three of the five trading sessions, the market ended on a firm note last week (June 22 - 26), as a recovery in global markets and expectations from the Union Budget tilted the scales in favour of the bulls on the final session.
The Sensex, which notched up a big gain of 419 points on Friday, ended the week with stronger by around 243 points or 1.67% at 14,764.64 while the Nifty closed nearly 62 points or 1.43% up at 4,375.50
nd the week ahead (June 29 - July 3, 2009) is going to be a hectic one with investors, big and small, making some calculated moves on speculation as to what will be in store for Top Business News
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India Inc and the market, in particular, in the Union Budget that will be presented on July 6.
he new UPA Government has quite an unenviable job on hand. The Indian economy is not in a bad shape. In fact, compared to its peers, it is far well off. Still, a lot needs to be done to keep the economy moving forward without significantly widening the fiscal deficit.
The government has more or less spelt its priorities right. With no Left parties in the current coalition, the ruling UPA is all set to go ahead and implement its disinvestment agenda this time around.
And then, there are certain important moves to be made by the government, especially with regard to the Insurance Act Amendment Bill, increasing spending on power generation and deregulation of fuel prices among others.
One major area that is likely to be pampered with bounties is the infrastructure space. On hopes the Government will give tremendous thrust to infrastructure development, a section of investors have already built up long positions in several stocks in that space. And more buying is expected in the sector ahead of the Budget.
The Railway Budget is scheduled to be presented on July 3, the final trading day of the forthcoming week. There is a speculation that this time around there will not be a fare cut as the ministry had announced a 2% cut in passenger fares while presenting the Interim Railway Budget in February this year. The market is expecting the government to push ahead certain public-private partnership initiatives through the forthcoming railway Budget.
After pumping in funds for close to three months, foreign institutional investors have been selling almost relentlessly in the second fortnight of this month. For any upside momentum to sustain, FIIs will have to at least stay invested in the market.
Any massive withdrawal by them could result in a slide of great magnitude, and, with domestic mutual funds not stepping up buying any significantly, make recovery a rather tough proposition in the near term.
It now looks that FIIs are waiting for the Budget and the budget speech. If some of the promises made by the UPA ahead of the elections are met through the budget, then there is every reason to believe that the market will embark on a journey up north. Sometime, lack of negatives from the Budget may prove positive enough triggers for the market to stay afloat in the bull orbit.
But this time around, with global markets reeling under doubts of economic uncertainties, the market will certainly need some positive surprises from the Budget to keep investors, read bulls, rooted to the ring.
While a couple of strong rallies are expected during the course of the week, some weak spells are also likely and the reasons for such weakness may largely be due to global factors. Post Budget, India Inc will be coming out with its report cards for the April - June 2009 quarter. Expectations of buoyant numbers from some top-notch companies may trigger some rallies at a few front line counters during the week. | Market
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