Expert View | Budget 2024 to focus on capex, Sensex eyes 90K by year-end: Subhash Chand Aggarwal of SMC Global | Stock Market News

How will the policy announcements of Budget 2024 impact stock markets amid the current bullish sentiments that have been propelling indices to fresh peaks? What are your major expectations from Modi 3.0’s first Union Budget?

Indian stock market has made multiple record high after the formation of NDA government at the center for the third time in a row in June 2024. Market seems to have appreciated the cabinet allocation by the newly formed government which actually saw no changes in the key ministries like finance, defense and home ministry, indicating supportive policy continuity. 

Amid, strong domestic growth, improved corporate earnings and easing inflation the market is expecting well-balanced Union Budget aiming at fiscal consolidation on the one hand and with more allocation on capital expenditure boosting manufacturing (incl. PLI), infrastructure, agriculture and its allied services and rural sector on the other.

With the recently concluded Lok Sabha election results and upcoming verdicts of Budget 2024, will FII and FPI inflows rise in 2024? What kind of activity by foreign investors do you anticipate this year? Will the US Presidential elections in November impact the sentiment of FIIs/FPIs in any way?

Foreign investors have been selling for a while, but now the trend has been reversed. India’s strong economy is a big draw. Investors like stable economies with high growth, low inflation, and political stability. India is currently the world’s fastest-growing major economy.  Including Indian bonds in a major global index and giving Indian stocks a bigger role in another index are positive signals to foreign investors. 

These changes are expected to bring in billions of dollars. The country’s young population, growing cities, and ongoing infrastructure projects making it an attractive market for long-term investors. Overall, the outlook for FPI inflows into India is positive. The combination of a strong economy, supportive policies, and long-term growth prospects is likely to bring foreign investors back to India. Regarding the US presidential election, its global economic influence makes it a closely watched event, including in India. 

A pro-business administration in the US often leads to bullish trends in emerging markets like India. Given the strategic, economic, and cultural ties between India and the US, India expects an administration that is open to negotiating mutually beneficial trade deals. Policies favoring foreign investments, especially in technology, infrastructure, and energy sectors, are crucial for India, making the US election rhetoric and policies significant for Indian investors.

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