July would be an eventful month with the major event of the maiden Union budget being the focus of attention. After the landslide victory of the NDA government, expectations are running high. Our budget expectations have been covered separately along with the stocks in focus and our preferred stocks for buying.
The other major event to look forward to will of course be the corporate results, which would also reflect whether the euphoric rise seen in some of the beaten down sectors such as capital goods, infra, and real estate were partly justified.
A major cause for concern would be the poor rainfall seen in June, which has raised the alarm bells in the Finance Ministry, since the tight fiscal situation, rising inflation, and sluggish growth have already limited the options of the new Finance Minister. Any further delay in the advent of monsoon beyond July could add to the inflation woes.
Last, but not the least, tension in Iraq has seen crude oil prices spiking. Although tensions seam to have eased in the last week, any escalation could see the crude prices hardening, which would strain India’s oil bill, which is already a strain on the finances.
Overall, we look forward to an exciting month ahead. Traders and investors are betting big on the budget. At our end, we have taken a cautious stance like the one we did the last time during the Lok Sabha elections and advise our clients to focus on quality stocks and keep an eye on capital protection, which is imperative after the stupendous rise seen in the past few months.
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