Sonam Srivastava of Wright Research, while talking to Moneycontrol on the future direction of the market and the Union Budget 2022, said that the economy has digested all the news related to the country and the world like Fed’s tapering, expensive valuations and the effect of Omicron. India’s economy is in good shape. Apart from this, it seems to be improving further with good signs.
Talking on the upcoming Union Budget, Sonam Srivastava said that in the upcoming Union Budget on February 1, the government can announce incentives for agriculture structure keeping in mind the elections to be held in UP and Punjab.
Significantly, the market has lost about 9 per cent so far from its recent bottom. When Sonam Srivastava was asked whether this rally can be called a pre-budget or pre-earnings rally, she further said that from my point of view, many reasons are responsible for the recent rally. In the last week of 2021, we got to see the Santa Claus rally. FII selling pressure appeared to be waning on the back of the holiday season, but gained momentum in the first week of 2022 due to attractive valuations and easing of Corona concerns.
He said that the banking and financial sectors seem to be shining in this rally. The rally in these sectors is indicating a pre-Budget rally as banking reforms are usually carried out in the Union Budget, besides a good results season, which can act as a positive factor for the market. .
He further said that the effect of all the negative news related to the market seems to be coming to an end. It is expected that if there is a focus on growth in the budget and new announcements are made for this, then the market may look like a new high.
He further said that there are many possibilities attached to the Union Budget. I am hopeful that the budget on February 1 will focus on growth rather than focusing too much on the fiscal deficit. Since the demand of rural areas seems to be decreasing, therefore special provisions should be made for rural and MSME sector in the budget. Support can be seen from the government to push infrastructure in the budget. Apart from this, there may also be news of relief for the hospitality and transport sector while struggling in the post-Corona epidemic situation.
Talking on the issue of disinvestment, he said that there is a need to change the legal framework for successful disinvestment policy, but in the current budget, such a thing is not expected. However, despite this, it is expected that the government will continue to focus on disinvestment.
Talking about the December quarter results, he said that keeping in view the good growth in the economy and rising demand in the festive season, it is expected that the results of the companies will be strong in the December quarter. The performance of the IT sector is likely to remain strong. Apart from this, the banking sector can also perform well. Industrial, realty and cement sectors are also expected to perform well in the third quarter. On the other hand, the performance of the FMCG sector may remain weak due to weak rural demand. Due to supply related constraints and inflationary pressures, their earnings and margins are likely to be impacted.
.