Expect Budget to be positive for capex-driven sectors, says Amish Shah

Capex as a percentage of Budget expenditure was 18 per cent in FY17 and FY19. Now, it has come down to 16 per cent… There is scope for capex allocation to go up, says Shah

The government has ammunition left on both fiscal and monetary sides, says Amish Shah, India Equity Strategist & Co-Head, India Research, BofA Securities. He tells Samie Modak, capex spending, bank recapitalisation, and PSU restructuring policy are some of the key things to look for in the Budget. Edited excerpts:

How do the markets appear from a valuation point of view?

Valuations are now high. If US stimulus comes through, the market will continue to rally on the back of liquidity. Our year-end Nifty target is 15,000. We expect full-year returns to be in single digits.

Besides global liquidity, is there any other tailwind