Domestic markets are expected to remain volatile during the election season, said analysts. TCS will be the first major company to unveil quarterly results on Thursday. Gift Nifty at 24,400 signals a marginal gain for Nifty futures at open. On Wednesday, Nifty futures closed at 24,355. Besides, the focus has now shifted to the upcoming Budget, scheduled on July 23.
“We expect the market to consolidate in the higher zone and any dip is a buying opportunity for long-term investors. Corporate earnings will start tomorrow with TCS first to announce numbers. Thus, the IT sector is expected to remain in focus,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.
According to global investment advisory Morgan Stanley, the impact of the budget on the market has been on a secular decline, albeit actual performance is a function of pre-budget expectations (as measured by market performance ahead of the budget). As of now, the market seems to be approaching the budget with exuberance and could be dealing with both volatility and a correction post budget, if history is a guide, it said.
Rajesh Bhosale, Equity Technical Analyst, Angel One, “For the market, the key things to watch are the extent of fiscal consolidation (0 to 10 bps of GDP over the interim budget), the delta in spends on physical and social infrastructure (by about 20-25bps of GDP over the interim budget), sector level incentives/spends (see inside for details) and changes to capital gains tax rates for equities (which we do not expect).
“We think the market could be surprised by the lack of major tax cuts or redistribution spends,” he said.
We are overweight Financials, Consumer Discretionary, Industrials and Technology and underweight all other sectors,” he further added.
Meanwhile, equities across Asia Pacific region are up in early deal on Thursday, following the strong closing of US markets.
