Sentiment is at work at the Stock Exchanges…more visible on days such as these…when the Union Budget is announced
In the Morning the Sensex and Nifty were up marginally…as the FM began his speech at 11 am,they remained positive…90 minutes into his speech,at around 12.30 pm and around the time the BJP decided to walkout,the Indices gathered fast momentum and he Sensex rushed towards 400 points rise and 16600 while the Nifty sought over 100 points and 5000
What’s my first reaction ?….so what’s New !?…simply continuing the Fiscal and Infrastructure Road Map
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You don’t need a Visionary…any FM or a layman can do this…. to sell yours assets to part fund your fiscal deficit…Rs 25000 crs is the Disinvestment for 2009/10 and Rs 40000 crs for 2010/11…..to reduce pressures on the Government Borrowings…Borrowings has already crossed Rs 4 lakh crs in 2009/10…Government plans a lower Rs 3.45 lakh crs in 2010/11 !….My sense is that this figure may be revised upwards if Oil again crosses US $ 100 or if Disinvestment Figures don’t work out
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Fiscal Deficit is pegged at Rs 381408 crs or a lower 5.5% of GDP for 2010/11…Inclusive of Oil and Fertiliser Bonds,In 2008/9 it was 7.8% of GDP and in 2009/10 it’s going to be 6.9% of GDP
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Total Expenditure for FY 2010/11 has been upped 8.6% at 1108749 crs of which Plan Expenditure is up by 15% to Rs 373092 crs and Non Plan Expenditure is up b y 6% to Rs 735657 crs
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All Media Stock Channels are excited over the increase in the Direct tax Slabs Range…so what’s new..this was already announced much earlier what the New Slabs would be from April 1,2010…it’s already on wikipedia…check it out
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DTC and GST are already scheduled for being implemented by April 1,2011…The FM only hopes he can be able to do this
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GDP Growth rate is 7.2% this year,may be revised upwards…FM wants to return to the high 9% rates…This is expected to help reduce the pressures of funding fiscal deficits through borrowing,asset sales and deficit financing…but depending on this can throw you for a Toss if twin challenges of Food Inflation amd Potential Oil Price Surges play up the squeeze…check out a few days old Blog on this
This Budget has come and gone….markets will soon return and be guided by prevailing Sentiment and Momentum in turn guided by Global Issues
In short,this Union Budget does not give you a Clear Signal to BUY Stocks immediately…take your time to make appropriate selections at appropriate prices….Markets are not going to simply run away up fast
Gives you enough time to Reflect and then Act
Cheers !