In the post poll full budget, the govenment could increase its FY25 capital expenditure outlay by 8-10% from the ₹11.11 lakh crore allocated in the vote on account.
By MAHAVIR LUNAWAT
Amidst general elections, the primary market continues to remain vibrant, with amazing responses to certain IPOs such as Awfis Space Solutions. The confidence levels can be gauged by these offerings that have been launched, defying the earlier trend. As we write this review, Kronox Lab Sciences’ IPO will be open from June 3 to 5.
Get ready for a wave of IPOs from both new-age businesses and traditional sectors as we are optimistic post the election results. There are several factors why we believe this. First, there’s been an increase in domestic capital. Then, there are improved governance practices and a thriving Indian entrepreneurship spirit, as well as supportive government policies, especially when it comes to FDI.
Indian Market update: Indian Market witnessed profit booking after strong break out of last week ahead of general election results going to be announced next week. We may see volatility in the market in the short term ahead of election results and surge in the US 10 year treasury yields. As per monthly economic report of Financial Ministry for April, the industrial activity is rising and fixed investment is gathering strength on the back of elevated government capital spending.
India‘s GDP in the fourth quarter of financial year 2023-24 is expected to attain growth within the range of 6.1-6.7 per cent, lower than over 8 per cent rate recorded in the previous three quarters, according to projections by various economists. The GDP numbers for the fourth quarter (January-March 2024) and the provisional estimates for the 2023-24 fiscal year are scheduled to be released by the government on May 31. According to economists, the expected growth in 2023-24 fiscal is estimated to be in the range of 7.6-7.8 per cent.
Stocks belonging to sectors such as fast-moving consumer goods (FMCG), agriculture, automobiles – especially two-wheelers and tractors – retail and hotels are likely to be in focus in the next few months, as the India Meteorological Department (IMD) has forecast an above-normal monsoon. Sufficient rainfall in the June-September season can lead to faster growth and lower inflation, according to analysts. The above-normal monsoon will likely benefit sectors and companies with a presence in rural areas, as it boosts spending from the bottom and favours consumption-related sectors.
India could increase its FY25 capital expenditure outlay by 8-10% in the full budget to be presented later, thanks to better-than-expected tax revenue and a record surplus transfer by the RBI to the government. The government allocated ₹11.11 lakh crore in the vote on account.
S&P Global rating’s upgraded sovereign outlook after 10 years to “Positive” citing improved quality of public spending and expectation of broad continuity in reforms and fiscal policies. India’s rating remains unchanged at BBB
Global Market Update: THE US market trend remained flat to negative this week. We have seen surge in US 10 treasury yields this week to around 4.63%. Commentaries from various Fed officials echoed hawkish signals from FOMC members. The rhetoric of no rush to loosen monetary policy was consistent with recent statements by FOMC members and minutes from the Committee’s last policy-setting meeting.
Brent crude traded in thin range during week and trading around $83 to $84 per barrel, weighed down by growing expectations that borrowing costs could stay higher for longer, hurting the demand outlook. Investors braced for an OPEC+ meeting on 2nd June where the group is expected to keep supply cuts in place for next quarter as well to maintain price stability. Geopolitical concerns in the Middle East and Russia- Ukraine also continued to support oil prices at lower levels in short term. (The author is Managing Director, Pantomath Capital Advisors Pvt. Ltd)
