Union Budget and Stock Markets

A key annual event that is keenly observed and followed across the socio-economic strata is the Union Budget. Normally, the Budget has a bit of everything which affects not only the rich but also the marginally rich, the middle-class, and the poor. It is an event that has the potential to change the way we deal with our expenses, ambitions, plans, and desires. It also contains path-breaking reforms that can change the course of the economy, sectors, and businesses. The Union Government, as part of this massive exercise, seeks feedback and holds series of discussions from various Industry bodies, trade associations, thought leaders, economists, experts from across sectors and reviews them as a part of the Budget preparatory exercise.

Going much beyond the stated purpose of articulating the “Statement of Accounts and Allocation of Funds”, the Budget attempts to incorporate various policy reforms and measures with the objective of achieving economic growth and progress, social welfare and upliftment.

Among other measures, changes in policies especially taxes have a distinct correlation with stock markets. Whilst some Investors build speculative positions based on their expectations from the Budget, others wait for the Budgetary announcements to happen and then take a more considered view on their investment decisions. Both are guided by the underlying relationship between the Budget and its impact on the economy and the stock market. Let us go back in history and try to get a deeper understanding of how this crucial aspect has indeed played out, in the past.

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What does the recent broad-market rally in markets tell us?

A key characteristic of the rally in Indian stock markets since April 1, 2020 is its broad-based nature. Contrary to the polarization seen in CY2018 and CY2019 when a few high quality names kept the bellwether Nifty 50 up, the recent rally has witnessed broader participation of mid-and-small cap stocks. This broad nature of the rally has clearly provided opportunity to investors to make money. But this does not mean that everyone invested made handsome money.

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The GDP vs Stock Market Conundrum
Alphaniketan is an Investors Education initiative from Alphaniti

The GDP vs Stock Market Conundrum

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The recent GDP growth number at (-) 24% for the period April to June 2020 has kindled a debate on the apparently complete disconnect between the broad economy and equity market performance during the period.
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Financial Planning

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Financial Planning is the process of developing a roadmap for your financial well-being from your current finances. It is recommended that one should start planning and managing at a young…

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Outlook on the US Dollar
Alphaniketan is an Investor Education initiative from Alphaniti

Outlook on the US Dollar

2020 is an exceptional year in almost every sense. The year has taught us many things. It has not only changed the way we live and think but also the way we invest.

In fact, the year has made us acutely realize “change is constant” is going to be the norm which most of us have to adhere to stay relevant. These aspects are reflected in the movement of the US dollar.

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Distribution of Covid Vaccines – Challenges and Opportunities
Alphaniketan is an Investors Education initiative from Alphaniti

Distribution of Covid Vaccines – Challenges and Opportunities

As we move closer to the day COVID-19 vaccines will be allowed for mass usage, the optimism in the air is progressively increasing.

Stock Markets across the world are scaling new peaks with many key variables indicating sustained rebound in economic activities. However one needs to view the current market sentiment with measured perspective and a practical approach. While the general optimism around launch of vaccines is running high, the on-the-ground situation will be challenging for implementation of mass immunization programs especially in a developing country like India of our size and population.  

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Investing at Market Peaks
Alphaniketan is an Investors Education initiative from Alphaniti

Investing at Market Peaks

Ever since the stock market hit its recent low in March 2020 correcting some 40% in response to the Covid-19 related lockdown and the ongoing sharp rebound thereafter, market experts have been largely caught on the wrong foot, intermittently predicting boom times ahead and a sharp correction.

The market is now up about 80% from the March lows and some 40 to 50% above the Nifty targets given by most of the leading brokerages in April 2020.

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