PSU stocks dropped over 9% on Budget Day, with the BSE PSU index falling 2.7%. Investors were disappointed by a lower-than-expected capital expenditure allocation of Rs 11.2 lakh crore. Key sectors like defense, railway, and power saw declines, with defense PSUs and railway stocks losing up to 4%. The budget's flat allocations led to investor disappointment.
This week, 748 companies will announce quarterly earnings, with key results expected from Asian Paints, Titan, Airtel, SBI, M&M, ITC, and LIC. Sector highlights include Power Grid, Divi's Labs, Tata Power, and Bharti Airtel, among others. Notable earnings announcements span from February 3 to February 8, indicating a busy week for the markets.
Nifty closed at 23,482, snapping a four-day winning streak post-Union Budget 2025-26. The budget emphasized middle-class tax relief and fiscal consolidation. Key support for Nifty lies at 23,250-23,200, with resistance at 23,650. Sectors like FMCG, Auto, and Private Banks are poised for growth. FIIs continue to exit, but historical trends suggest a potential rebound.
The Bharat Mobility Show 2025 showcased India's auto sector shift to EVs and clean fuels. Despite near-term demand challenges, long-term growth is driven by electrification, rural demand, and government support. Maruti Suzuki and Hero MotoCorp project strong earnings growth through EVs and premium offerings. Tax reforms and infrastructure investments will further boost sector expansion.
Indias rapid economic growth, strong stock market performance, and favourable demographics are attracting NRI investors. Diversification into global markets should be strategic, considering geopolitical risks and currency fluctuations. Mutual funds remain a preferred investment option. NRIs should balance risk and liquidity while leveraging NRE/NRO accounts for effective wealth management.
Mutual funds: The Budget 2025 focuses on governance, fiscal consolidation, and boosting consumption through tax cuts. Lower reliance on small savings and increased market borrowings may impact bond yields. RBIs liquidity measures and policy decisions will be key market drivers. The yield curve may steepen, with SDL borrowings affecting spreads in the near future.
India led global IPOs in 2024, driven by strong economic fundamentals and retail investor participation. In 202526, domestic investors, sponsor-backed firms, MNC listings, and profitability-focused startups will shape the IPO landscape. Regulatory scrutiny will rise, pricing windows will shorten, and volatility may impact execution. Strategic planning will be key for successful IPOs.
The government initiatives, including a maritime development fund, MSMe reclassification, and a capex allocation, aim to boost manufacturing and credit demand. Companies like Adani Ports, Axis Bank, and Bajaj Finance are expecting indirect long-term benefits due to these measures.
