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Avendus Capital's Vaibhav Sanghavi on Budget expectations

Business Standard caught up with Vaibhav Sanghavi, Co-CEO, Avendus Capital Public Markets Alternate Strategies on what the street expects from Budget and impact of US Fed policy on emerging markets

Budget 2022 | Equity markets | US Federal Reserve

Puneet Wadhwa  |  New Delhi 

Q1: It has been a rollercoaster ride for the over the past few sessions.

Are they nervous ahead of the Budget presentation on February 1 or is to more to do with global factors? Ans: >Market nervousness more to do with global factors, especially the US Fed policy >Street now expects more hikes in 2022 than envisaged in 2021 >Lot to look forward to in the Union Budget Q2: So, what are the expecting from the budget this time around? >More to do with continuation of existing policies, especially ease of doing business >Continued rationalisation of income-tax and taxes on fuel >Emphasis on capex programs, spending, rural push >Focus on COP and climate change Q3: How much fiscal room does the government have to do all this? >Robust tax collections to help spending push >Fiscal expenditure should not be inflationary >Fiscal deficit should not be an issue Q4: Given that the retail investors have been a big part of the market rally, what can they expect? Ans: >Most of the things are in place to grow their pool >Hope for continuation of existing policies >Financialisation of savings will continue Q5: And how should one position in the ahead of the D-day? Ans: >US Fed policy outcome is important and will impact sentiment >Budget an important event; continuity in existing policies will be appreciated by the markets >US Fed outcome can trigger volatility and correction >Expect the second half of 2022 to be good for emerging markets, including India

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First Published: Thu, January 27 2022. 08:00 IST