In a note, Morgan Stanley said a new sentiment has emerged in a market where no new income tax has been declared. In addition, the decision to privatize two state-owned banks and one insurance company to boost growth by raising costs behind infrastructure as well as to raise capital through disinvestment will boost the market.
Morgan Stanley said the budget lays the foundation for the Indian stock market to rise in line with global markets. He also mentioned the cyclinical sectors, interest rates and sensitive sectors as well as midcaps.
The stock market rallied just when Finance Minister Nirmala Sitharaman presented the budget on February 1, and the Sensex jumped 2300 points. This boom continues today. The Sensex was washed out after hitting a historic high of Rs 50,000 in the previous week of the budget. The government has announced huge investments in infrastructure to increase the flow of capital into the economy, and huge spending will also be made in healthcare.
Morgan Stanley says that if the budget announcements are properly implemented, it will increase the share of corporate profits in the country’s GDP.