Stock Market Strategy for Budget 2024: Top Five Stocks to Consider

Amid the fluctuations observed in the Indian stock market due to global concerns like the US-China trade war, there are still significant opportunities for investors. Despite the Nifty 50 index dropping over 125 points, the BSE Sensex falling around 400 points, and the Nifty Bank index correcting over 300 points in early trades, market experts see this as a strategic investment opportunity rather than a cause for panic.

The Market's Response to Upcoming Budget

Experts have noted a trend reversal in the Indian stock market after substantial selling last Friday. This trend is expected to persist until Tuesday, as investors anticipate the Union Budget 2024 by the Modi 3.0 Government. This annual financial statement is crucial as it details the government's fiscal strategies and expenditure plans for the year ahead. The current global scenario, influenced by the escalating US-China trade tensions, remains a significant factor. However, investors are advised to focus on companies expanding their capital expenditures (CAPEX) recently, as the Union Budget is expected to be growth-centric. Sectors such as railways, infrastructure, energy, oil and power, auto, and banking are highlighted as areas with promising listed companies.

Strategic Insights from Industry Experts

Sugandha Sachdeva, Founder of SS WealthStreet, shares her strategic insights on stock market preparation ahead of the Union Budget 2024. Her extensive experience and expertise lend credence to her predictions. She anticipates major reforms aimed at sustainable growth and improved social welfare, with strategic budget allocations towards sectors like agriculture, infrastructure, public healthcare, railways, power/renewable energy, real estate, defense, logistics, and tourism. Additionally, Sachdeva expects adjustments in income tax slabs or an increased standard deduction under the new tax regime to boost disposable incomes. She also foresees measures to balance the fiscal deficit while ensuring adequate funding for development projects.

Avinash Gorakshkar, Head of Research at Profitmart Securities, emphasizes the importance of selecting quality stocks ahead of Budget 2024. He advises looking at companies with a history of CAPEX expansion and debt reduction. Debt-free stocks with strong CAPEX backgrounds are ideal candidates as the Union Budget may stimulate growth in such stocks. Gorakshkar predicts that the growth-oriented budget will benefit infrastructure and related segments, while also creating demand in the banking and auto sectors due to favorable national economic conditions.

Investor Caution and Strategy

Sugandha Sachdeva also highlights the need for caution as Budget 2024 aims to address the diverse needs of the economy while balancing populist measures and fiscal prudence. Investors should stay informed and be prepared to seize opportunities arising from the Budget’s announcements while remaining aware of potential market corrections.

Top Stocks to Consider Ahead of Budget 2024

Avinash Gorakshkar recommends focusing on specific stocks in the auto and banking sectors before the Union Budget 2024. He suggests considering M&M and Tata Motors in the auto segment, and SBI, ICICI Bank, and Axis Bank in the banking sector.

Sugandha Sachdeva offers additional stock picks based on empirical data, suggesting that while volatility may be high on budget day, certain stocks are poised for medium-term gains despite short-term dips. She recommends the following stocks with specific buying ranges, target prices, and stop losses:

1. SBI Card: Buy around ₹680 to ₹685, target ₹840, stop loss ₹595.

2. Oberoi Realty: Buy at ₹1570 to ₹1580, target ₹2050, stop loss ₹1280.

3. RITES: Buy at ₹650 to ₹660, target ₹880, stop loss ₹520.

4. KPIT Tech: Buy at ₹1690 to ₹1695, target ₹2080, stop loss ₹1500.

5. HBL Power: Buy at ₹540 to ₹550, target ₹765, stop loss ₹460.

Disclaimer: The views and recommendations expressed here are those of individual analysts or brokerage firms. Investors are advised to consult with certified experts before making any investment decisions.

This comprehensive strategy and stock recommendations can help investors navigate the market's volatility and capitalize on potential growth opportunities ahead of the Union Budget 2024.