Lack of boosters: foreign brokers

Most foreign brokerages have hailed the Budget for its fiscal prudence. However, lack of growth-boosting measures means the Budget provides little for the markets. Some brokerages have raised concerns over high dependence on divestment and telecom spectrum sales for achieving fiscal consolidation

HSBC

On the Budget
Delicate balance between growth and fiscal prudence, which is positive for equities and bonds

Market stance
Remain underweight on Indian equities as earnings expectations still need to come down. Valuations still high on a relative basis versus the rest of the region

Sector preference
Positive for consumer, industrials, real estate, while marginally negative for public sector banks and telecoms

BNP Paribas

On the Budget
Fiscal discipline and low government borrowing programme the key positives

Market stance
India's recent underperformance may continue in the near term. Second half of the year appears better. Budget has done little to change sentiment about the corporate earnings environment

Sector preference
Positive for NBFCs, real estate, downstream oil, cement. Negative for telecom, automobile, upstream oil, and jewellery sectors

UBS

On the Budget
The government opts for fiscal consolidation over growth-boosting stimulus. The fiscal consolidation is of poor quality due to high dependence on divestment and telecom spectrum sales

Market stance
The Budget is unlikely to alter market; global risk environment should drive markets in near term

Sector preference
Underweight on infrastructure, capital goods. Neutral on consumer discretionary (including four-wheelers) and staples. Positive on consumer stocks due to safe-haven tag

Nomura

On the Budget
The key message is that the government has chosen macro stability over growth. Policy focus on stability should also enable India to stand out from other emerging markets as a beacon of stability, a view that was starting to get questioned lately by investors.

Market stance
Budget will not move the needle too much by itself. There is little by way of new push to capital expenditure in any new areas. Expenditure growth is muted, and the Budget does not go out of its way to boost growth. The market will look to other possible measures such as Goods and Services Tax, Bankruptcy Act, power sector reforms.

Sector preference
Positive for two-wheelers, FMCG (high rural exposure); roads, housing finance firms (tax concessions) and private banks (potentially benign rate cycle). Negative for telecoms (higher auction fees) and four-wheelers (higher taxes)

Standard Chartered

On the budget
Adherence to fiscal-deficit targets will enhance policy credibility and macroeconomic stability, which is a big advantage in a volatile global environment

Market stance
The Budget should help ease some fears of rupee moving to new lows in the short term. Don't expect sustained positive impact on the rupee. Expectations of a further policy rate cut by the central bank have increased, to support domestic equity markets