Union Finance Minister Nirmala Sitharaman is set to present the Union Budget 2024-25 in Parliament during the third week of July. This will be the first budget following the National Democratic Alliance’s (NDA) third consecutive victory, led by the Bharatiya Janata Party (BJP), in the 2024 Lok Sabha elections.

Fiscal deficit and borrowing

• Fiscal deficit: Revised down to 5.8% of GDP from the previous target of 5.9%. The fiscal deficit for 2024-25 is estimated at 5.1%.
• Gross borrowing: Estimated at ₹14.13 lakh crore.
• Net borrowing: Projected at ₹11.75 lakh crore for FY25.

Defense allocation

• Defense budget: Increased by 4% to ₹6.2 lakh crore, up from ₹5.94 lakh crore in FY24.

Tax structure and revenue

• Tax structure: No changes to direct or indirect taxes.
• Tax benefits: Extensions for start-ups and investments by sovereign wealth funds or pension funds until March 31, 2025.
• Revenue receipts: Estimated at ₹30 lakh crore, up from ₹26.99 lakh crore in the previous fiscal year.

Social and economic initiatives

• Mudra yojana loans: 30 crore loans given to women entrepreneurs.
• STEM education: Women and girls now constitute 43% of enrolment in STEM courses.
• PM Awas Yojana: Over 70% of houses allotted to women in rural areas.
• Cervical cancer vaccination: Encouragement for vaccination of girls aged 9-14.

Capital expenditure

• Capex outlay: Increased by 11% to ₹11.11 lakh crore (3.4% of GDP).
• Rail bogies: Conversion of 40,000 normal rail bogies to Vande Bharat Standards to enhance passenger safety and comfort.

Housing initiatives

• PM Awas Yojana (Grameen): Targeting to build an additional two crore houses over the next five years.
• New housing scheme: Aimed at helping the middle class buy or build houses.

Prime Minister Narendra Modi has secured a third term in office, but the BJP fell short of a full majority by 32 seats, necessitating coalition support from key allies like JD(U) chief Nitish Kumar and TDP’s chief Chandrababu Naidu. This coalition victory has significant implications for the real estate market, bringing much-needed policy certainty and bolstering investor confidence.

The scale of the BJP’s victory has delivered unprecedented policy certainty, which is crucial for the real estate sector. Political stability and clear government policies directly influence investor confidence, affecting real estate investment decisions positively.

Key policies and reforms

New Tenancy Act:

The government’s new tenancy act has revitalized the rental housing market by introducing accountability measures and transparency in rental agreements.

Stressed Asset Fund:

The ₹25,000 crore stressed asset fund reflects the government’s commitment to addressing stalled housing projects. Offering priority debt has restored buyer confidence, leading to a swift revival of construction activities across major markets.

Credit Linked Subsidy Scheme (CLSS):

The extension of CLSS under PMAY until December 2024 has significantly boosted demand.

Realty Stress Fund:

The establishment of a ₹60,000 crore realty stress fund has provided crucial last-mile funding to builders, allowing them to resume construction projects.

RERA and Consumer Protection:

Institutionalization of RERA across states to enhance consumer protection and developer accountability.

Urban Infrastructure Initiatives:

Initiatives like Smart City, AMRUT, and Pradhan Mantri Awas Yojana (PMAY) have increased demand in the real estate sector post-elections. These efforts focus on improving urban infrastructure and providing affordable housing, thereby enhancing the quality of life in cities.

Structural Reforms:

Government’s focus on structural reforms to liberalize the economy, particularly in infrastructure and renewable energy sectors. Anticipated reforms in land acquisition and business practices are expected to attract increased investor interest and spur further growth in the industry.

Prime Minister Modi’s third term has brought stability and policy certainty, crucial for the real estate market. The government’s commitment to reforms and infrastructure development has bolstered investor confidence, leading to a positive outlook for the sector. With continued political stability and strategic initiatives, the real estate market is poised for significant growth in the coming years.

India’s Lok Sabha election results have a significant impact on the country’s stock market, as investors closely watch the outcome to understand the potential political landscape and its impact on the economy. Let’s delve into how the recent election results have affected the stock market in India, and explore the implications for both domestic and foreign investors.

After the exit polls projected a two-thirds majority for the ruling BJP-led alliance, the stock market saw a significant drop, erasing all gains from the previous day. The fear of uncertainty and concerns about the market’s sustainability led to a sharp decline in various sectors. Bank stocks fell by 7.8%, realty dropped by 9.1%, and infrastructure declined by 10.5%. The volatility index surged to its highest level since March 2022 as investors reacted to the exit poll results.

Chief market strategist at Geojit Financial, highlighted the market’s negative reaction to exit polls that indicated a clear victory for the ruling party. Despite the majority projection, the market’s volatility gauge remained high, signaling underlying unease among investors. Head of equity research at William O’Neil and Company, emphasized that the market’s expectations were not met, leading to disappointment and a subsequent market correction.

The global market also reacted to India’s election results, with Asian share markets showing mixed responses. The MSCI’s index of Asia-Pacific shares declined by 0.4%, while U.S. stocks registered mild gains. The Euro Stoxx and German DAX futures were down, reflecting a cautious market sentiment. Additionally, the U.S. labor market data was closely watched, with expectations of a potential interest rate cut later in the year.

In light of the election results, market analysts anticipate further market corrections as investor sentiment stabilizes. The focus will shift towards policy announcements and reforms, with a particular emphasis on BJP’s mandate and its implications for the economy. As global markets await India’s official election results, the stock market is expected to witness continued volatility in the coming sessions.

The Lok Sabha election results have triggered a significant market reaction, leading to widespread fluctuations in various sectors. Investors are closely monitoring the political landscape and its impact on India’s economy. As the market adjusts to the election outcomes, analysts foresee a period of uncertainty followed by potential policy changes and reforms. Amidst the volatility, investors are advised to exercise caution and closely monitor market developments for informed decision-making.

Goldman Sachs throws its weight behind India’s booming economy! Their analysts see Indian stocks, bonds, and the rupee currency as some of the most attractive options in emerging markets. Here’s why:

Strong fundamentals drive growth:

• Soaring stock market: Healthy corporate earnings are fueling a strong Indian stock market.
• Bond market boom: India’s inclusion in major international bond indexes, coupled with improving government finances and moderating inflation, makes Indian bonds highly attractive.
• Rupee’s allure: Ample foreign exchange reserves position the rupee as a top choice for carry trade strategies (investing in high-yielding currencies).

India’s “Come for Stability, Stay for Growth” advantage:

• Low volatility: Indian assets offer investors a relatively stable environment with lower sensitivity to external market fluctuations.
• High yields: Indian fixed income (bonds) provides attractive returns compared to other options.

Landmark events  on the horizon:

• Upcoming elections: Prime Minister Modi’s re-election bid is a near-term factor for financial markets.
• Bond market inclusion: India’s inclusion in JPMorgan’s influential emerging market bond index (expected in late June) could attract a staggering $40 billion in foreign investment.

Long-term focus on domestic strength:

Goldman Sachs acknowledges the short-term impact of the elections but emphasizes that India’s long-term economic health is the primary driver of asset returns.

Considering an investment in emerging markets? Look no further than India! Its strong fundamentals, attractive yields, and stable environment make it a compelling option for investors seeking long-term growth.

Today, the Indian stock market witnessed a surge in buying activity, propelling both the Sensex and the Nifty 50 to unprecedented record highs. The Nifty 50 commenced the day at 22,614.10, marking a significant leap from its previous close of 22,597.80, ultimately reaching a peak of 22,959.70 during the trading session—a notable 1.6% increase. Similarly, the Sensex started at 74,253.53, surpassing its previous close of 74,221.06, and surged to an intraday high of 75,407.39, also a 1.6% rise.

By 2:35 pm, the Sensex was up by 1.30% at 75,182, while the Nifty 50 showed a 1.33% increase at 22,898. Additionally, the Nifty Midcap index and the Small cap index 100 experienced gains of 0.30% and 0.05%, respectively, at that juncture.

Here are the key factors driving today’s market euphoria:

Election optimism

With the fading of election-related uncertainties, the market is witnessing a surge in optimism. Investors are now focusing on acquiring quality stocks, anticipating sustained political stability post Lok Sabha elections.

Positive macro indicators

The Reserve Bank of India’s announcement of a record ₹2.11 lakh crore dividend to the Centre for FY24 has bolstered market sentiment. This infusion of funds is expected to provide the government with additional fiscal maneuverability, potentially boosting infrastructure spending and reducing fiscal deficit.

Banking sector momentum

Shares of leading banks such as HDFC Bank, ICICI Bank, and Axis Bank are driving market gains. The significant drop in India’s 10-year bond yields, following the RBI’s dividend payout, has particularly buoyed banking stocks.

Domestic institutional investment

Despite foreign institutional investors offloading Indian equities this month, domestic institutional investors (DIIs) have exhibited strong buying behavior. DIIs have injected ₹38,331 crore into Indian stocks in the cash segment until May 22, offsetting the outflow from FIIs.

Technical outlook

The Nifty 50’s breakthrough past crucial resistance levels and the formation of a robust support base indicate a positive trajectory. Analysts foresee the index reaching the 23,000 mark by month-end, supported by aggressive put options writing and strong technical indicators.

Today’s market surge underscores the resilience and potential of the Indian stock market, fueled by a convergence of favorable economic indicators and investor confidence.

The upcoming Lok Sabha Election 2024 in India presents a unique opportunity for investors. As renowned investor Peter Lynch famously stated, investing in the right sector at the right time can yield substantial returns. This article dives into the top 5 sectors poised for significant growth leading up to and following the elections.

Defence sector (estimated market size: ₹80,000 crore)

The Indian government is heavily invested in bolstering national security. India boasts the fourth most powerful military globally, with significant active personnel and a massive volunteer army. Increased government spending on defense equipment and technology positions this sector for substantial growth.

Infrastructure sector (Government capex allocation: ₹11.1 trillion for FY 2024-25)

Infrastructure development is crucial for economic growth and competitiveness. The government’s massive ₹11.1 trillion infrastructure capex allocation for FY 2024-25 signifies a strong focus on this area. Projects like Bharatmala aim to improve connectivity and stimulate economic activity, making infrastructure stocks like L&T and Ashok Leyland attractive options.

Power & renewable energy sector (focus on solar energy adoption)

India’s power sector, encompassing conventional and renewable energy sources, offers immense growth potential. Government initiatives like PM Suryodaya Yojana 2024 promote solar energy adoption, making it a promising investment avenue. Companies like SJVN Ltd. and those focused on renewable energy projects stand to benefit significantly.

Banking & financials sector (GDP growth expected to drive banking activity)

Banking and financial services are the backbone of any economy, facilitating capital allocation and economic activity. With India’s GDP projected for exponential growth, the banking sector plays a critical role in supporting this expansion. State Bank of India and other PSU Banks offer attractive investment opportunities as interest rate cuts and economic growth boost the banking sector’s performance.

Tourism & hospitality sector (Government’s “Incredible India” campaign boosts tourism)

India’s rich cultural heritage and diverse geography make it a top tourist destination. Initiatives like the “Incredible India” campaign promote tourism, creating growth opportunities in the hospitality sector. Stocks like IRCTC Ltd. and Interglobe Aviation Ltd. (Indigo) offer promising avenues for investors. The expansion of India’s aviation sector further underscores the long-term potential of tourism-related stocks.

By strategically allocating your portfolio across these 5 sectors you can potentially unlock significant growth opportunities in the lead-up to the 2024 Lok Sabha Elections. These sectors are driven by government initiatives, shifting consumer trends, and economic imperatives, making them prime targets for investors seeking to capitalize on India’s upcoming economic boom.

Just three days before the completion of its five-year tenure, Pakistan President Arif Alvi dissolved the National Assembly shortly after a summary signed by Prime Shehbaz Sharif advising the dissolution of the Lower House of Parliament, was sent to the Presidency. A statement issued by the Presidency just before Thursday midnight read: “President Arif Alvi has dissolved the National Assembly under Article 58(1) on the advice of the Prime Minister.” The dissolution of the National Assembly, which elects the federal government, has brought an end to the Sharif-led coalition government, reports Xinhua news agency.

According to the Pakistani constitution, if the Assembly is terminated before its stipulated time, the general elections would be held within 90 days and if it completes its mandated period then the election will take place within 60 days. Following the end of the government, the Prime Minister will discuss with the opposition leader of the house to decide on a caretaker premier who will take charge until the next general elections. On his last day in power, Sharif on Wednesday chaired a meeting of the federal cabinet, made a farewell address in Parliament and chaired two separate meetings on overseas Pakistanis and the setting up of an ‘Olympic village’ in Islamabad, Dawn news reported.

Addressing the federal cabinet, he confirmed it was his government’s last day in power. The Prime Minister said the coalition government sacrificed their political capital for the sake of the country as they had a “gigantic task to save the motherland from looming default”. After the cabinet meeting, he went to the Parliament House to address the National Assembly. In his farewell speech in the Assembly, Sharif said he would start consultations on Thursday to decide about a caretaker Prime Minister within three days, who will choose his cabinet for three months or until the formation of the next elected government. Soon after the National Assembly’s late-night dissolution, troops were seen at different points in Islamabad. It wasn’t immediately clear whether the soldiers’ presence was because of security reasons or VIP movement.

As the Pakistan government is readying to bring in an interim setup with a mandate to hold elections within 90 days, Prime Minister Shehbaz Sharif has hinted towards a delay in the polls, creating a rift within his coalition partners. The visible rift, as seen on various social media posts, is exposing the lack of talks and closed-door consultations between Sharif’s Pakistan Muslim League-Nawaz (PML-N)) party and its major coalition partner Pakistan People’s Party (PPP), The premier has said that elections will be held only on the basis of the 2023 digital census, hinting towards a delay between eight months to one year. “We have to hold the elections on the basis of the new census… When the census has been conducted, the polls should be held on its basis unless there is an obstacle that cannot be overcome. But I don’t see any such hurdle,” he said during an interview.

Sharif’s comments have sparked a widespread debate as the PPP has made it clear that it would not endorse any decision that results in delaying the polls. “The party has already taken a position on the subject that fresh delimitation would cause a delay in holding general elections and given this reason, the party has opposed it,” senior PPP leader Nawaz Muhammad Yousaf Talpur said. “Fresh delimitations would in theory require four months, but in reality, it might take as long as eight months or a year,” said PPP information secretary Faisal Kareem Kundi. Meanwhile, the Mutahida Qaumi Movement-Pakistan (MQM-P) has also opposed the decision of going to the polls based on the old census.

“We have already taken the matter up with the Prime Minister. We believe that the polls should only be held as per the new delimitations, which is only possible after the digital census,” MQM-P senior leader Mustafa Kamal said. “If the government goes into polls as per old census, it would deprive millions of their voting rights.” The open statements on public fora and social media platforms by political leaders further exposes the detachment and lack of communication between the coalition parties. “The PML-N leadership would want to delay the elections so that it can use the time to campaign and do a much needed damage control to gain the confidence of its voters before the elections,” said senior political analyst Javed Siddique.

“On the other hand, the PPP would be desirous to make full use of the deteriorated loopholes and openings in Punjab, after PTI’s meltdown and PML-N’s weak political position. “PPP would not want to allow PML-N time to campaign for a longer period of time and re-strengthen its political position in Punjab. This way, it would be able to make its comeback in Punjab and become the driving force in the formation of the next government as it would have its stronghold in Sindh province, its solid political alliance in Balochistan and a considerable penetration in Punjab and the Khyber Pakhtunkhwa,” the analyst added. “The ongoing rumours about the caretaker setup being brought in for a longer stretch of time that would function beyond 90 days, and with financial empowerment of the interim setup seen as part of that scheme, the recent revelations by the premier only provide credence to suspicions of inordinate delay in elections,” said political analyst Rameez Khan.