Markets to see Budget overhang this week; IIP, inflation data eyed: Analysts

The overhang of the Union Budget will persist in the equity market this week, while investors may also shift their focus to macroeconomic data and global cues, analysts said.

Benchmark indices had snapped their four-session rising streak and closed with sharp losses Friday after the Budget proposal to raise public shareholding threshold fanned fears of oversupply of new papers in an already overbought market.

In her Budget speech, Finance Minister Nirmala Sitharaman said it was the right time to consider increasing minimum public shareholding from 25 per cent to 35 per cent.

As many as 1,174 listed firms, including giants like TCS, Wipro and DMart, will have to off-load promoter stakes worth about Rs 3.87 lakh crore, a Centrum Broking report said.

"With the most awaited event finally over, its overhang will continue this week as the offshoots of certain implementations will be visible in the capital markets," said Jimeet Modi, Founder and CEO, SAMCO Securities & StockNote.

According to Jayant Manglik, President - Retail Distribution, Religare Broking, "We might see the overhang of the Union budget on Monday as well. The sharp plunge in the index indicates more pain ahead and decline below 11,800 in Nifty would trigger further fall."
Vishal Kampani, Managing Director, JM Financial Group, said, "The first budget of the NDA 2.0 has clearly demonstrated the intent towards the ambitious target of becoming a USD 5-trillion economy, with some concrete and decisive proposals."
V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services said, "The proposal to raise public stake in listed companies is desirable but will face practical constraints in implementation in the case of some large-cap companies."