GR Exclusive: Expect Nifty To Test 25,000 In Budget Week; Sees Gold At Rs 85K, Silver At Rs 1.20 Lakh In H2

SMC Global Securities chairman, and managing director Subhash Chandra Aggarwal expects the overall Union Budget of 2024-25, to be balanced, with continued focus on capex and attracting private investment. In an interview with GoodReturns.In, Aggarwal does not expects stock market to have a dramatic surge on July 23, but sees fundamentals strong still. As per him, Nifty could test 25,000 levels in Budget week. Furthermore, he says that gold and silver could touch new peak of up to Rs 85,000 to Rs 1,20,000 by 2024-end.

The Union Budget will be announced by FM Nirmala Sitharaman in both houses of the Parliament on July 23, under Modi 3.0. The Budget session has commenced from July 22 and the economic survey has been announced as well. The session will end on August 12.

Here are the full excerpts from the intervview of SMC Global Securities, chairman, and managing director Subhash Chandra Aggarwal with GoodReturns.In:

1. With the budget approaching, what are your overall expectations?

This budget presents a tough task for the Finance Minister. The ruling coalition needs to balance social obligations from allies like the TDP and JDU with fiscal discipline, aiming for a 4.5% fiscal deficit. Despite this, I expect a balanced budget. They have already announced a significant capital expenditure budget, and the recent RBI dividend provides additional room for social spending. We could see capital expenditure increase to 12 lakh crore.

2. How will stock market react on Budget day. What would be support and resistance levels for Sensex and Nifty. Any recommendations on that day?

The market anticipates growth and social spending, so I don't foresee a dramatic surge. Fundamentals remain strong, suggesting a floor around 24,000 on the Nifty. I expect it to test 25,000 during budget week. This range (24,000-25,000) presents good buying opportunities at the lower end and profit booking potential at the higher end. Specific sector performance will depend on budget allocations.

3. Any specific expectations for the stock market, mutual funds, or commodities from the budget?

There's talk of increasing the holding period for shares from two to three years, which could negatively impact the market. However, the government might offset this by reducing holding periods for other assets. There are also rumours of measures to curb speculation in the derivatives market, potentially through increased lot sizes or transaction taxes. On a positive note, I expect continued focus on capital expenditure and attracting private investment. Sectors like housing, cement, infrastructure, and IT should benefit from this.

4. Will Gold and silver prices rise on the Budget day. Also, what is your outlook on gold and silver by end of 2024-end. Should investors book profits or stay invested?

The government is promoting digital gold through Sovereign Gold Bonds, which offer capital appreciation and a 2.5% annual interest. However, central banks are increasing their gold reserves, and global supply chain disruptions persist. Considering these factors, I expect gold prices to reach 80,000-85,000 INR by December 2024. Silver, being a scarce commodity, should also rise to around 120,000 INR.

5. What about the railway and PSU sectors?

PSUs have performed exceptionally well this year, with improved profitability and reduced NPAs. They have bridged the valuation gap with private companies. While I anticipate continued good performance, their growth might normalize going forward.

6. Finally, what are your top sector picks for the second half of 2024?

I would go with IT, auto, healthcare, infrastructure, real estate/housing, and construction sectors. I also see reasonable potential in the banking and finance sector.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.