Business
Before polls, stocks are expected to benefit from the governments interim budget.
By - 31 Jan 2024 10:20 AM
As the government of Prime Minister Narendra Modi prepares to unveil its final budget before the national elections, traders are keeping a close eye on companies that are involved in road, port, and airport construction. In her budget speech on Thursday, Finance Minister Nirmala Sitharaman is expected to highlight shares associated with state-owned companies and rural spending, as policymakers look for ways to increase demand in the vast rural hinterland.Building infrastructure has become a key component of PM Modi's economic strategy, enabling India to grow faster than any other major economy. The nation's stock markets, which have increased in all but one year since PM Modi took office in 2014, began to show signs of optimism. This month, foreign investors withdrew more than $2.6 billion from local equities, indicating a slight decrease in enthusiasm.
Spending on Infrastructure
One of the government's main priorities is the construction of power plants, highways, and tunnels; during the past three years, capital spending has more than doubled.The main winners of this policy push have been the shares of industrial and capital goods companies, ranging from billionaire Gautam Adani's conglomerate to engineering behemoth Larsen & Toubro. Over the past year, BSE Ltd.'s sectoral gauges of capital goods and industrial firms have increased by over 70%, outpacing the benchmark index's 17% gain.
Vinit Sambre, head of equities at DSP Mutual Fund, said over the phone, "A lot of the market performance has come from the capex cycle; equity investors would want to see that momentum continue." "Any guidance on the capex path will be closely watched."
