The expectations are running high ahead of the all-important Budget 2021, but given the fact that most of the positives are priced in, it has become a ‘sellers market’ ahead of the Budget thanks to weak global cues, Neeraj Chadawar, Head - Quantitative Equity Research, Axis Securities said in The Market Podcast with Moneycontrol.
“Investors are advised to stay cautious and sit of 10-15% of cash to be deployed at lower levels. The market will provide better entry points in the next couple of weeks as the current set up seems to be a seller's market,” explains Chadawar.
Foreign institutional investors (FIIs) who were consistent buyers in Indian markets for the past three months have turned net sellers in the domestic market, says Chadawar.
It will be interesting to see how FIIs behave post Budget who added $33 bn in Indian equity markets in FY21 which were higher than the net figure of FY10, FY11, and FY12.
If FIIs continue their selling and DIIs fail to buy the position then we could see further forward pressure in the market. The above factors suggest that volatility is likely to continue, suggest Chadawar.
Sectors to watch:
Chadawar expects the government to focus on sectors such as infrastructure, consumer durables, automobiles, and BFSI in the upcoming Budget.
Broadly, roads and construction activity will remain a focus area that will be helpful for infrastructure companies and building material.
Real estate could get a further push from the government. Affordable housing could see more government-oriented schemes that will also be the focus area of the government.
We also expect the PLI scheme to get extended to AC manufacturing, LED lighting, and component used for the manufacturing of electrical.
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