By Despite recent declines in the Indian stock market driven by weak global cues and rising tensions in the US-China trade war, investors are urged not to panic but to see this as an opportunity for strategic investment. The Nifty 50 dropped over 125 points, the BSE Sensex plummeted around 400 points, and the Nifty Bank corrected over 300 points during early morning trading. While these figures might seem alarming, market experts advise that this situation presents a unique chance for discerning investors.
Experts have noted a trend reversal in the Indian stock market following sharp sell-offs last Friday. This reversal is expected to continue until Tuesday, as the market anticipates the Union Budget 2024 by the Modi 3.0 Government. The Union Budget is a significant event in India’s financial calendar, outlining the government’s fiscal policies and spending plans for the upcoming year. Experts attribute the current global market downturn to the escalating US-China trade war, but they remain optimistic about the Indian market’s potential.
Investors are encouraged to focus on companies that have expanded their capital expenditures in recent quarters. The Union Budget is expected to be growth-oriented, with significant investments in sectors such as railways, infrastructure, energy, oil and power, automotive, and banking. These sectors are likely to benefit from increased government spending and policy support.
Sugandha Sachdeva, Founder of SS WealthStreet, shares her insights on the stock market strategy ahead of the Union Budget 2024. With her extensive experience and expertise, Sachdeva predicts significant reform measures aimed at fostering sustainable growth and enhancing social welfare.
She expects strategic allocations toward the agricultural sector, infrastructure, public healthcare, railways, power/renewable energy, real estate, defense, logistics, and tourism. Additionally, revisions in the income tax slabs or an increase in the standard deduction under the new tax regime are anticipated to boost disposable incomes. Sachdeva also highlights the importance of balancing the fiscal deficit while ensuring adequate funding for development projects.
Avinash Gorakshkar, Head of Research at Profitmart Securities, emphasizes the importance of selecting quality stocks ahead of the budget. He advises investors to consider companies that have worked on CAPEX expansion and debt reduction.
A debt-free stock with a strong CAPEX history is deemed an ideal investment as the Union Budget may further fuel such stocks. Gorakshkar expects the upcoming budget to be growth-oriented, benefiting infrastructure and allied segments. He also foresees demand growth in the banking and automotive sectors due to favorable budgetary conditions and a strong national economy.
As the Union Budget 2024 approaches, investors should stay informed and cautious, ready to capitalize on emerging opportunities. While the market may experience volatility on budget day, strategic investments in well-chosen stocks can yield significant returns.
Sachdeva suggests buying SBI Card, Oberoi Realty, RITES, KPIT Tech, and HBL Power. She provides specific entry points, target prices, and stop-loss recommendations for each stock:
- SBI Card – Buy around ₹680 to ₹685, target ₹840, stop loss ₹595
- RITES – Buy at ₹650 to ₹660, target ₹880, stop loss ₹520
- Oberoi Realty – Buy at ₹1570 to ₹1580, target ₹2050, stop loss ₹1280
- KPIT Tech – Buy at ₹1690 to ₹1695, target ₹2080, stop loss ₹1500
- HBL Power – Buy at ₹540 to ₹550, target ₹765, stop loss ₹460
While the recent dip in the Indian stock market may appear concerning, it offers a strategic entry point for investors. The anticipation of a growth-oriented Union Budget 2024 provides optimism for various sectors, particularly those with significant CAPEX and debt reduction initiatives. By staying informed and making prudent investment choices, investors can navigate the current market volatility and position themselves for potential gains.
