- Even as all attention was riveted on the Union Budget, the Nifty managed to hold the 11,000 mark despite going below the mark briefly. Unless there is anything negative in the budget we expect the level to hold.
- The big budget expectations will be on the agricultural reforms and farm income front. Rural spending could be a corollary. Also expect a bigger allocation to defence and more farming out of defence orders domestically.
- FIIs were net sellers to the tune of Rs.(-137) crores while DFIs bought Rs.1295 crore on Wednesday. The sharp buying by DFIs appears to be ahead of the Union Budget and that also explains the revival in the Nifty ahead of the Budget.
- Markets in the US did correct as yields continued to rally but Europe and parts of Asia showed some recovery. SGX Nifty is trading closer to 11,100 and the big theme for tomorrow will be the quality and focus of the Budget.
- Our first theme for the budget is rural beneficiaries. We see stocks like UPL, Jain Irrigation, Kaveri Seeds among the stocks that are likely to benefit from greater allocation to rural India and more farms spending power.
- The second theme for the budget is consumption driven by FMCG and banks and NBFCs. Our top picks ahead of the Budget are Hindustan Unilever, Britannia, Kotak Bank, Bajaj Finance and Equitas Finance.
- Our third theme for the budget is defence players to benefit from more domestic farming out of defence orders. We see Bharat Electronics, Bharat Forge, Tata Power and L&T among the major beneficiaries of this focus.
- We suggest investors to focus on these budget themes ahead of the budget as they are likely to benefit from the budget focus.
