Inclusive budget by a populist government

Last week was an action oriented week with important events like - Budget and FED interest rate decision coupled with ongoing corporate results announcement. Despite expectations of a pre-budget populist budget, FM made an all inclusive budget for the GYAN caste - Garib, Youth, Annadata (Farmer) and Nari (women). It was Inclusive budget by a populist government which aligned with the objective of AMRIT KAAL for a VIKSIT BHARAT by 2047, where they have announced schemes encompassing - Renewable Energy (Rooftop solar), Women Empowerment, increased Infrastructure spends (Rail/ Housing schemes), kept the direct/indirect taxes unchanged ensuring fiscal responsibility.

The US Federal Reserve indicated that the benchmark interest rate would remain unchanged at 5.25% to 5.50% for the fourth straight meeting, in line with market expectations. The US central bank concluded its first policy-setting meeting of the year with a unanimous decision to keep the policy rate at its 23-year high, but stated that it "does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward two percent." The rate-setting panel also stated that the "risks of achieving its employment and inflation goals are moving into better balance.while certainty of rate cuts in 2024 is going higher, the timelines are getting debatable

Third Quarter for Nifty-50 earnings grew by 18%, ~3 to 4% higher than expected. IT services reported a dismal performance but is bottoming out, while banks reported better-than-expected results signalling peaking out growth. Consumption is still low, underscoring the difficulties faced by low-income households due to high inflation and low income; high-end residential real estate is still strong, underscoring the stable financial situation of high-income households. Reinforcing the contradiction that has existed in the Indian economy for over a year.

During the week, Nifty was up 2.4% crossing a psychological barrier of 22,000 and touching an all time high of 22,127 on the closing day of the week. Nifty PSU banks gained 11.5%, Oil & gas up by 9.1% and CPSE by 8.9%. Most sectors ended positive for the week except for telecom and capital goods were down to a marginal extent.

Gainers for the week

NBCC +47%: Government's push for infrastructure spending in the interim budget.

Infibeam Avenues 33%: Rallied sharply on back of positive surprise in quarterly sales performance.

IRB Infra Developers 32% : Healthy Growth in corporate profits for Q3 FY24

Looser 

PAYTM -36% : Regulatory direction by RBI to stop accepting deposits and payments by its subsidiary Paytm Payments Bank Ltd (PPBL).

Vedant Fashion -15% : Hit an 18-month low based on the weak business outlook and soft management commentary.

AU Small finance Bank -11% : Company's asset quality declined

Over the course of next week while the macro calendar remains light, post budget, post FED policy commentary and outlook from corporates is likely to drive markets.

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