Markets tune up to FM Arun Jaitley's reform music, Sensex sees 800-point jump in 4 days

NEW DELHI: Finance minister Arun Jaitley on Friday made it clear that he means business. He said the course for reforms was on despite the drubbing in Delhi. The S&P BSE Sensex managed to rally over 800 points in just 4 trading sessions, expecting Jaitley to draw up an additional capital plan for sectors such as manufacturing, infrastructure.

The picture looks obvious. Brokerages expect Jaitley to boost capital spending and offer tax breaks to an under-performing manufacturing sector in the February 28 budget.

"In the budget, investors should look at how the government is spending and in what areas they would really increase their spending to lift the economy," says Mahesh Patil, Co-CIO, Birla Sun Life Mutual Fund.

The government should increase its expenditure in few areas, especially in the infrastructure side and also what incentive it gives to revive the manufacturing sector, capex cycle etc.," he adds

Post Delhi elections, the mood had became a little sour as market participants got little worried that the defeat may force Prime Minister Narendra Modi to go for populist measures, which will hamper the growth process.

But then Jaitley came in as the saviour, dispelling concerns that the Budget will be populist in nature, ET said in a report.

Jaitley said the government will vigorously pursue economic policy changes, undeterred the drubbing in Delhi.

"The fact that four (state assembly) elections have been won and one has not been won is absolutely no ground for believing that there will be any slowdown on the path which we have undertaken," he said in response to a query at a joint press conference with US Treasury Secretary Jacob Lew at the end of the fifth Indo-US Economic and Financial Partnership meeting on Thursday.

Jaitley is seen unveiling a raft of economic reforms in the February 28 Budget as the Narendra Modi government looks to revive the economy, generate jobs and encourage investment.





The S&P BSE Sensex surged over 300 points in trade on Friday to reclaim its crucial psychological level of 29000. The Sensex surged from levels of 28227.39 hit on 9 February to 29,094.93 recorded on 13 February, which translates into gains of 867 points in a matter of 4 trading sessions.

The S&P BSE Sensex finally closed 289.83 points higher or 1.01 per cent to 29094.93. It hit a low of 28835.70 and a high of 29154.67 in trade today.
Analysts expect the momentum to continue till the Budget. They expect markets to touch fresh record highs ahead of the main event fuelled by hopes of further reforms to be announced in the Budget in sectors such as infrastructure, defnce, manufacturing, banking, health etc.

The pre-budget rally has already begun with the return of foreign institutional investors. Tracking the momentum, the Sensex could easily touch 30,000 and Nifty could possibly hit levels above 9000 ahead of the event, say experts.

"The market is already moving on Budget expectation of further reforms by the Finance Minister and U.S president visit also helped the sentiment," says A K Prabhakar, Independent Market Expert "We could possibly see levels of 9200 on the Nifty and 30,000 on the Sensex ahead or around the event," he adds.

Analysts are advising investors to use every opportunity, especially the volatilities which come along the way, to stay invested.

"Even though corporate earnings remained muted, but the market might still run up and probably consolidate between 8500 to 9000 mark on the Nifty at least till the budget, and probably what the budget will deliver will give a further leg up to the markets," says Mayuresh Joshi - VP, Institution, Angel Broking.

The government is expected to announce some big and bold reforms to push the Indian economy to double digit growth. The budget will also outline the government's vision for next five years.