The Budget This Year

Friends,

The budget this year has been very sensible and initiates many things that would go a long way in improving the economic condition of the nation. There are very few announcements that would affect the stock market either way, adversely or positively. But the underlying strength in numbers presented, for revenue as well as expenditure along with the scope of garnering a good amount of money as income tax on the deposits made in bank accounts after the announcement rendering old 500 and 1000 rupee notes invalid currency, augurs well for the coming financial year.

The housing getting a boost in form of its now being good for treatment as infrastructure by government will be helpful for creation of jobs and good for cement and steel sector.

Income tax relief on account of reduction of 5% in first slab leaves extra liquidity of about Rs 12500/- in hands of tax-payers and would convert in to greater spending on consumables goods.

There is scope of RBI reducing benchmark interest rates in its routine exercise coming Wednesday as inflation if pretty much under check and within the required limit permitting for reduction in interest.

So we may expect the market to remain in good shape in coming time.

The Nifty stocks so far analysed after the 3rd quarter results mostly signal buying and I do hope you are keeping track.

Krishna Khandelwal

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