Experts convinced mkt in intermediate downtrend post budget

The budget impact

Rajeev Mantri, Director, GPSK Investment Group, said, this slump in the market was a reaction to the budget which was, in a word, 'unmistakably socialist'. "There are two features that I would like to draw attention to, the first is the Finance Minister's reference to Indira Gandhi's bank nationalisation as a visionary-I don't know what kind of signal that sends to foreign investors and the second feature is that his acknowledgement that the growth from 2004 to 2008 was driven in a large part by private investment but the budget does nothing to encourage or reward that."

Commenting on his expectations from the market in the near-term, Mantri said, "We are still digesting the kind of surprise budget offered because hopes had been built up from the Congress's quite a resounding victory in the elections and those hopes were kind of disappointed with a socialist and populist budget."

Commenting on how he felt about the whole financial space and the way the bond market reacted the day of the budget, Prasad said, "I think the concerns are valid in the sense that people are worried what kind of a borrowing programme and what impact it will have in the markets." He believes, from the banking space, the concern is that the impact of the agricultural interest subvention, six months more time being given to them and indeed what the bond market will have an impact on treasury profits. "Let's not forget that when the interest rates moved down the banks have been riding the yield curve now when it starts moving the other way these are the concerns which are quite valid as far as the markets are concerned."