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from Expert Zone:

India Markets Weekahead: ‎Tough for the Nifty to break out of its range

(Any opinions expressed here are those of the author and not of Thomson Reuters)

The Nifty continued its upward trajectory to close at a two-week high of 7,792 in a holiday-truncated week. However, this optimism was not reflected in the broader market, especially the mid caps and small caps.

Among the sectors, public sector banks, realty, infrastructure and capital goods, which led the rally earlier, have underperformed in the last few weeks whereas defensives such as FMCG, pharma and IT stood out, an irony when markets are close to a record high.

Macro data released during the week wasn't encouraging with consumer inflation, especially food inflation, continued to soar whereas IIP data indicated a renewed slowdown. Exports data released on Thursday indicated that they grew faster than imports, though the deficit touched a high of $12.2 billion.

The Nifty has been in a broad range of 7,500-7,850 since the last two months despite FII. flows of about $2.3 billion during the period. This can be attributed to a lack of substantial triggers to push the markets into a new zone. The hopes and expectations of investors with the new government were reaffirmed with the statement of intent but it seems the markets would await the execution of that intent to break out of the range.

from Expert Zone:

How high will the Sensex go?

(Any opinions expressed here are those of the author and not of Thomson Reuters)

A bronze bull sculpture is seen as an employee walks out of the Bombay Stock Exchange building in MumbaiSince April, the stock market has been in a frenzy after a long period of utter gloom. In quick succession, the Sensex jumped month after month to cross 26,000 on July 7. This was not mere euphoria created by the election of the Narendra Modi government, with a single-party majority in the Lok Sabha after a long time.

from Expert Zone:

India Markets Weekahead: Tough for Nifty to climb above 7,800

(Any opinions expressed here are those of the author and not of Thomson Reuters)

Indian markets were unaffected by the week's international developments, with some help from encouraging domestic macro data and a pep talk by Finance Minister Arun Jaitley in post-budget discussions.

The Nifty recovered from the previous week's losses, closing 2.67 percent up at 7664. Positive IIP data was followed by benign inflation at 5.43 percent, a four-month low. Monsoon rains, which had been playing truant, recovered substantially with the deficit shrinking to 15 percent below average last week and covering the entire country.

from Expert Zone:

Budget strikes the right chord on reviving investment

(Any opinions expressed here are those of the author and not of Thomson Reuters)

Finance Minister Arun Jaitley (C) poses as he leaves his office to present the federal budget for the 2014/15 fiscal year, in New Delhi July 10, 2014. REUTERS/StringerPatient, consistent baseline play rather than aggressive serve and volley -- that about sums up the Narendra Modi-led government’s maiden budget.

from Expert Zone:

Budget 2014/15 reveals priorities, sets the stage

(Any opinions expressed here are those of the author and not of Thomson Reuters)

The new Narendra Modi government rides on a long wishlist of policies and reforms, with limited resources. Budget 2014/15, as expected, reveals the government’s priorities in the near and medium term.

Arun Jaitley poses as he leaves his office to present the union budget for the 2014/15 fiscal year in New DelhiThe inflation moderation imperative overshadows near-term headline growth desires, manifested in aggressive (albeit challenging) fiscal deficit targets. The projected fiscal deficit of 4.1 percent (3.6 percent of GDP in FY16) versus the 4.6 percent recorded in FY14, is in line with expectations. The reduction in the budget deficit is driven by hoped-for revenue growth rather than depressed spending growth.

from Expert Zone:

India Markets Weekahead: ‎Book out of high-beta stocks

(Any opinions expressed here are those of the author and not of Thomson Reuters)

Finance Minister Arun Jaitley (C) poses as he leaves his office to present the federal budget for the 2014/15 fiscal year, in New Delhi July 10, 2014. REUTERS/StringerThe Narendra Modi government presented its maiden budget on Thursday. Although the budget was welcomed by industry leaders, the market meltdown seems to be telling a different story, with the Nifty posting its biggest weekly loss in 15 months.

Should it have been a path-breaking budget or is it prudent to build the economy brick-by-brick by walking the middle path? The much hyped "bitter pill" turned out to be a "bland" one.

from India Insight:

Budget 2014: Reactions from the common man

Security personnel stand guard near sacks containing the papers of the federal budget for the 2014/15 fiscal year, at the parliament in New Delhi July 10, 2014. REUTERS/Adnan AbidiPrime Minister Narendra Modi's new government on Thursday unveiled a first budget of structural reforms that seek to revive growth, while spurning the temptation to resort to higher borrowing.

(Click here for Budget 2014 highlights)

India Insight spoke to people in New Delhi’s central business district for their thoughts on the budget:

from India Insight:

Bollywood seeks tax breaks from Budget 2014

By Shashank Chouhan and Sankalp Phartiyal

Bollywood is hoping that the newly elected government's first budget will contain tax breaks that will let it write a happy ending, at least for this year and next.

The Indian movie business, led by the Mumbai-based Hindi film industry, hopes Finance Minister Arun Jaitley's budget will reduce the tax burden on movie studios as well as theatre owners and operators, and will provide incentives that would let them open more theatres around the country to boost ticket sales.

from Expert Zone:

Modi’s first budget can be a great start

(Any opinions expressed here are those of the author and not of Thomson Reuters)

There are few opportune moments for a nation to enact bold economic reforms. For India, this week is one of them as Prime Minister Narendra Modi and his Bharatiya Janata Party (BJP) government unveil their first budget since sweeping to power in a landslide victory last May.

India needs the sort of shock therapy it administered in response to the 1991 crisis when foreign exchange reserves had dropped to just $1 billion. While current circumstances may be less urgent, they are no less critical. Economic growth has dropped to the 4-5 percent range, half the peak level of a decade ago. Inflation has risen between 9 and 11 percent over the past five years, crippling consumer purchasing power.

from India Insight:

Railway Budget 2014: Highlights at a glance

In his maiden budget, Railway Minister Sadananda Gowda said the bulk of future railway projects will be financed through public-private partnerships and his ministry would seek cabinet approval for allowing foreign direct investment in the state-owned network, excluding passenger services.

India's railway, the world's fourth-largest, has suffered from years of low investment and populist policies to subsidise fares. This has turned a once-mighty system into a slow and congested network that crimps economic growth.

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