Budget 2024: Bank stocks exhibit high sensitivity to interest rates changes, forecasts in budget, says Vinit Bolinjkar

Interim budget 2024: Given its interim nature, the forthcoming budget is probably not going to include any major pronouncements regarding new taxes or spending proposals. Brokerages and analysts agree that it will nonetheless set the stage for future policy decisions and be closely monitored for the rate of fiscal consolidation as well as policy priorities for capital expenditures and non-capital expenditures.

In its Pre-Budget Expectations 2024–25 research report, brokerage house Axis Securities said that the majority of changes have been carried out by the government outside of the budget's purview, which has greatly diminished the budget's impact on the stock market during the last several years.

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Also Read: Budget 2024: Expect muted infra allocation, focus on defence, EV: Pramod Amthe 

Market participants continue to view it, nonetheless, as a crucial stimulant supporting the growth of the Indian economy and, consequently, the Indian market.

In an interview with Mint, Vinit Bolinjkar, Head of Research, Ventura Securities, discusses trading strategies, crucial market levels, and the sectors and stocks to be on the lookout for on the interim budget day. Edited excerpts:

1. On the day of the interim budget, what could the market's key levels be?

Immediate support is positioned at 21,140 and 20,980, with resistance hovering around 22,200.

What are the trading opportunities around Interim Budget Day? In the case of a rally, what could be the level, and in the case of a correction, what is the level of support?

Long positions in bullish sectors like infrastructure, financials, consumer durables, and IT.

2. What trade opportunities can you explore on the day of the interim budget?

Identify potential long-term positions in bullish sectors such as infrastructure, financials, consumer durables, and IT. Explore leveraging sector-specific ETFs to capitalise on expected movements in individual sectors. Additionally, consider employing strategies like straddles or strangle holds to take advantage of heightened market volatility around the budget.

Also Read: Budget 2024: No sharp cutback in capex; focus may be on women-centric policies, says Achala Jethmalani of RBL Bank

3. Which sectors are most sensitive on Interim Budget Day, and which ones often provide the best opportunities?

Bank stocks exhibit high sensitivity to interest rate changes and economic forecasts announced in the budget. Allocations for infrastructure projects can significantly impact construction and related sectors. Measures related to subsidies, taxes, and rural development can influence FMCG and retail stocks.

4. Is there any trading advice for investors on the day of the interim budget?

Adhere to your risk management strategies and refrain from excessive trading in the volatile budget day environment. Stay well-informed with pre-budget expectations and stay updated with live news throughout the day.

Also Read: Expect manufacturing, infra boost in budget 2024: Alekh Yadav of Sanctum Wealth 

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.