SBI to ICICI Bank, HCL Tech to HDFC Life II Sharekhan says that the Budget was Bold and growth oriented Budget

The Union Budget 2021-22 highlights a significant shift in the government’s fiscal policy stance. Growth has taken precedence over fiscal prudence and the government proposes to substantially increase outlay for healthcare, infrastructure development & other capital expenditure programs. The Union Budget proposes pragmatic measures to raise resources through aggressive privatisation and monetisation of assets of public sector entities. Setting up of ARC/AMC to help clean up public-sector banks’ balance sheets has also enthused markets.

Markets were hence unperturbed by a higher-than-expected fiscal deficit of 6.8% for FY 2021-22 and the surge in the gross government borrowings figure to Rs 12 tn. In fact, the Budget has got a thumbs-up, though it would be interesting to see how the Reserve Bank of India reacts to an expansionary and inflationary fiscal stance. Going ahead, we expect the market’s focus to revert to quarterly earnings and global cues now. A strong Q3 result season and earnings upgrades would provide valuation support to markets. Post the Budget, we see a scope for continued re-rating of construction, building materials and public-sector companies

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HDFC Securities highlights that after showing a sharp weakness in the last six sessions, Nifty witnessed an excellent comeback on Monday on the day Union Budget 2021 and witnessed hefty gains of 646 points. After opening on a positive note, the market shifted into a minor consolidation in the early part of the session. As the union budget presentation started in the parliament, the upside momentum got picked up and it further strengthened towards the afternoon to later part of the session and closed near the highs.

Nifty on the weekly chart formed a counter attack bull candle so far, which indicates that the near term top reversal pattern that followed the last 6 sessions decline could be in danger of negation. If Nifty manages to sustain above 14753, then the bearish reversal pattern could be negated and the Nifty could scale further highs.
 
Conclusion: The sharp upside momentum of the market on the union budget day seems to have changed the sentiment of the market. The union budget has turned out to be an event for the market so far now. The next important hurdles to be watched are 14600 and the next 14753. At the lower side the area of 14000 could be a crucial support for the market ahead.
 
Investment Picks -

Large-caps: ICICI Bank, SBI, M&M, L&T, HDFC Life, HCL Tech, UltraTech, Powergrid, Cipla.

Mid-caps: JK Lakshmi Cement, AU Small Finance Bank, Polycab, Kajaria Ceramics, Supreme Ind, Max Financial Services, CESC, Tata Consumer Products Ltd.