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Indian markets rallied over 4 per cent so far in January in the run-up to the Budget 2022. The index is hardly 3 per cent away from hitting its record high above 18604. that was hit back in October 2021. With less than a fortnight remaining for
the announcement of the Union Budget for fiscal year 2022-23, here's what the
charts indicate for the key benchmark indices in the run-up to the mega
financial event on 01 February, 2022.
The sensex Likely target:
62,500 to 63,000 Upside potential: 2.50% to 3% The Sensex has conquered the
major resistance of 60,800 and managed to sustain above the same mark. This
small sideways movement suggests a possible breakout above the immediate
resistance of 61,600 and when that happens, one can expect a sharp surge in the
direction of 62, 500
The steady rise above 18000
levels suggests that we are in a pre-budget rally as most of the dips are
getting bought into. Hence, investors are advised to sit tight and maintain
their positions.
We are in a Pre-budget rally. The trend
is broad-based which is a very positive sign for the markets. There is buying
across stocks and across sectors. If we go by the trend, we might see the market
breaking previous all-time high,”
There are various expectations from the budget, as usual, every year, which
includes capital expenditure and infrastructure spending, to help fuel the
investment cycle, create employment opportunities and improve domestic demand.
We have collated
a list of top 5 trigger points that could give a boost to D-Street in Budget
2022:
Fiscal
Deficit:
The path of
fiscal trajectory would be the most important part of the Union Budget
2022-2023 amid the ongoing pandemic situation. Although most analysts see the
government maintaining the fiscal deficit path, if the government lowers the
fiscal deficit target it could certainly add more strength to markets.
Any encouraging
step which might give a clear path to lower fiscal deficit will be an important
trigger for markets.
Owing to the
current fragile status of the economy, government support is still needed to
sustain the ongoing economic momentum. Hence, the government may not opt for an
aggressive fiscal consolidation path.
Given a sharp
rise in GST collection and higher advance taxes, the government may find some
cushion in actual fiscal deficit in FY22 despite revenue loss due to cuts in
fuel excise duties, higher subsidies and a rise in expenditures due to
extension of free food grain scheme until March 2022. The government is likely
to maintain its fiscal deficit target at 6.7% for FY22E.