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The upcoming week promises to be a pivotal one for Indian equity markets as the highly anticipated Union Budget 2024 takes center stage. Investor sentiment has been buoyant, driven by expectations of pro-growth policies and strong corporate earnings. However, the market is expected to witness increased volatility as investors digest the budget announcements and quarterly results.
Key market drivers
- Union Budget 2024: The government’s fiscal policy will be closely watched for its impact on various sectors and the overall economy.
- Q1FY25 earnings: A slew of major companies will announce their quarterly results, influencing sectoral trends.
Global Cues: Global economic indicators, especially US GDP and inflation data, will impact investor sentiment. - FII and DII activity: The flow of foreign and domestic funds will continue to influence market direction.
Technical Indicators: Market analysts suggest caution due to overbought conditions and potential for a correction.
Sectors in focus
- IT: The sector has been a standout performer, driven by strong Q1 earnings and expectations of continued growth.
- FMCG: This defensive sector has shown resilience and is expected to benefit from rural consumption revival.
- Banking and Financials: The sector’s performance will hinge on the budget’s measures related to credit growth and asset quality.
- Metals and Energy: These cyclical sectors may witness volatility due to global commodity price movements.
While the overall market sentiment remains positive, however it is advisable to adopt a cautious approach due to the potential for increased volatility. Diversification and a long-term investment horizon are crucial for managing risk.